USA Lags On Cell Phones’ Marketing Potential

They’re hip, hot and everywhere on the planet. But despite a drumbeat about mobile phones being the new frontier in the ad world, marketers have been slow to dial it up, particularly in the United States.

That’s in part because creating a mobile strategy and message remain a challenge.

“The level of knowledge and understanding of the mobile marketplace by traditional and digital agencies doesn’t really exist today,” says Dan Rosen, managing director, AKQA Mobile in London, a mobile-dedicated unit of San Francisco-based digital agency AKQA.

The world’s best efforts recently have been on display at the Cannes Lions International Advertising Festival. Agencies and marketers have entered nearly 30,000 ads in 10 categories at the ad industry’s biggest annual competition. Some of the campaigns that already have won awards have included mobile components. The Grand Prix won by AMF Pension’s retirement campaign in the media-buying competition, for instance, included a feature for people to upload their photos via their mobile handsets and get them back doctored to show how they’ll look at age 70. HBO’s Voyeur Project, a multiple award winner, offers mobile downloads.

Mass Advertising

Nike and digital agency R/GA unveiled the Ballers Network, a networking site for streetball (urban basketball) players. Based on Facebook.com, it lets members organize pick-up games via mobile.

Advertisers are working hard to master mobile, not least because its potential as a medium far outstrips the Web on PCs. Mobile tops 3 billion users worldwide, while PC use is at 1.2 billion, and each of the increasingly Web-enabled digital handsets is a personal connection to an individual.

“It’s the world’s first direct mass medium,” says Rosen.

Being both direct and mass is advertising’s Holy Grail. And mobile offers the direct access to users wherever they go, including points of purchase—not just when they’re in front of a TV or PC screen.

Emerging Market

Important for global marketers, mobile handsets are the dominant way people access the Web in many emerging markets, as it is far cheaper, says John Gauntt senior analyst at digital ad tracker eMarketer. With a computer, “the cost of entry to get Internet access is about $1,200 for the PC and broadband; a mobile is less than half the cost.”

As updated handsets spread and ad effectiveness measures are perfected, worldwide advertisers’ spending on mobile will pass $19 billion in 2012, eMarketer predicts, from about $3 billion this year. Overall Web ad spending, which includes mobile, is estimated at $45 billion this year.

Mobile is “still very underrepresented by brands in terms of their budget. You look at the capability and the opportunity and how the budgets are being allocated, it’s laughable,” says Giovanni Maruca, director of Paramount Digital Entertainment’s mobile and interactive Europe unit. He’s now running a mobile promotion in 12 countries for “Indiana Jones and the Kingdom of the Crystal Skull”.

“We’re out there experimenting with a lot of stuff,” says Maruca. “But we’re still not sure what the return is. The metrics aren’t there. The allure is that there is a lot more interaction you can do from a mobile device, and the potential for the demographic information is much higher.”

Among reasons mobile advertising is a challenge is that the handset is not a smaller TV or PC, it’s a different user experience. Just as it does not work to replicate TV ads on PCs, marketers can’t simply downsize PC advertising for mobile.

“There’s a perception that (mobile) is like the Web, and if you can do it on the Web, you can do it on mobile, which has a limited real estate,” says Maruca. “You have to be more thoughtful and creative at the same time.”