With 2013 done and dusted, and January drawing to a close, it’s time to take a step back and consider what the coming year has in store for mobile advertising and app marketing.
Last year we had a range of companies and individuals from the mobile ad industry give us their predictions for 2013. Many ideas were put forward, but a few idea predominated. Most agreed on the potential growth of mobile RTB platforms (which is expected to reach $1.6 billion by 2016 in the US), the mainstream-acceptance of CPI (which certainly came to fruition – perhaps too much so!), and mobile ad spend driven by video and rich media (which again, also seems to have been on target).
But what about the year ahead? Once again we’ve asked a number of movers and shakers to look into their crystal balls and bring us their top trends for 2014. Comparing and contrasting between this year and last year shows just how quickly the mobile space is moving. As with last year, there’s plenty differing opinions, but most respondents see CPI being rubbished in favour of engagement-driven measurements, a new wave of social apps monetising with ads, and opportunities shifting eastward toward China, one of the fastest growing mobile device markets in the world.
Agree with our experts’ predictions? Have some ideas of your own? Let us know in the comments below.
The Top Mobile Ad and App Marketing Trends 2014
Ouriel Ohayon, CEO, AppsFire
Integrated native advertising
Integrated native advertising is going to take over the old, inefficient and over-exposed advertising formats born on our computers. Facebook showed the way and Twitter will expand that road following the acquisition of MoPub. Facebook too will become a mobile ad network, after a quarter or two of tests, and Facebook ads will show on other apps.
Deceptive ads, consolidation and going beyond app installs
Unfortunately deceptive advertising will still be running. The joint effort of Google and Apple will not stop some companies using manipulative ad formats, ad messages or mechanics to drive app installs.
But the majority of the market will start looking significantly beyond app installs and engagement based advertising, so not only drive installs, but also post-install actions or re-engagement will become a major trend. Every ad network will try to come up with a solution to finally closes the loop and very few will manage and execute this elegantly and efficiently at scale.
Finally it’s consolidation time: Darwinism will operate its magic and many ad corporations will get out of business (including some large ones), or be acquired.
Jud Bowman, CEO, Appia
Overcoming the App Discovery Challenge
In 2013, both the App Store and Google Play surpassed the one million apps mark. This number is going to continue growing exponentially, causing app discovery to become an even greater challenge. The rising popularity of mobile apps is great for mobile marketers, but it also makes for a very crowded ecosystem.
Mobile marketers are going to have a tougher time getting their apps noticed in such an expansive marketplace. With 63% of mobile users finding apps via app stores (Forrester), positive app store rankings and ratings will become critical – but it’s not the only piece to the puzzle. The combination of a great user experience and highly targeted marketing campaigns will result in increased downloads and help marketers break through the noise.
New Focus on Lifetime Value of Mobile Users
In 2014, the focus on high-quality, high lifetime value (LTV) mobile users will become critical for advertisers, publishers and developers. Hyper-targeting and localization will shift from “nice-to-have” to “need-to-have.”
Quality users will be an unyielding focus of mobile marketing this year. A user that regularly engages with an app will ultimately bring in more revenue over the lifetime of the relationship.
Marketers will adjust their strategies accordingly, and the numbers game is going to become more complex.
Djamel Agaoua, executive chairman, MobPartner
Mobile engagement will become the driver
2014 will be the year of app engagement and re-engagement marketing where the focus on lifetime value and ROI will take precedence over aggressive user acquisition campaigns based on driving installs. New and emerging technologies such as deep-linking, in-app tracking, and user tracking across multiple devices will drive this attitudinal shift by delivering more accurate and intelligent consumer targeting.
Big brands and the retail sector will take it up a notch
Expect to see significant investment in mobile this year from large brands and retailers seeking to make better use of mobile as a means to improve customer loyalty and boost engagement via in-store coupons and other online-to-offline marketing programs.
Advances in technology will also bring about the convergence of mobile marketing and mcommerce to “close the loop” and properly mobilise the purchasing of physical goods and services from a mobile device. Better targeting, tracking and deep-linking means that consumers will be able to click on an ad for a product they recently viewed and then seamlessly purchase it using their mobile. That said, mcommerce growth will be determined by the availability of secure, single-click payments on a country by country basis.
The US will see rising competition from EMEA and APAC
Geographically speaking, North America will continue to lead the mobile ad and mobile commerce markets. In Europe, the UK will maintain its leadership in the space, although northern and eastern European countries will see an upswing as well.
In Asia, app developers – especially Chinese ones – will experience rapid growth, as the Southeast Asian mobile market continues to expand and consumers upgrade from feature phones to smartphones. Also expect Chinese companies to up the ante with their own mobile discovery strategies as they look to acquire new international customers.
Erez Gross, SVP of mobile advertising, Matomy Media Group
Maturation and consolidation
2014 will see three important mobile advertising trends emerge: marketplace maturation; consolidation; and the increasing domination of consumer-friendly verticals.
Advertisers are projected to spend $25 billion globally on mobile advertising in 2014, compared to $15.8 billion spent worldwide in 2013. eMarketer estimates that North American advertisers will spend just over $12 billion in 2014 on mobile ad campaigns (52% of the worldwide market), while their Western European counterparts will spend $6.4 billion on mobile, or 25% of the total worldwide mobile ad spend.
Clearly, the demand for mobile advertising is moving in the right direction.
Quality issues must be resolved
An issue persists, though: quality. As the mobile marketing ecosystem matures, a bifurcation is starting to emerge. Ad networks and affiliates that focus on quality and user engagement as a means of delivering better ROI for advertisers are gaining marketshare against those that rely on the more traditional method of success in mobile, which often includes a heavy focus on installs and in-app purchases.
The mobile marketing ecosystem enters 2014 at an interesting and exciting phase in its evolution. Gone are the Wild West days of anything-goes tactics, having been replaced by a more sophisticated, focused brand of mobile advertising. But quality and control issues remain, which could make some advertisers hesitant to invest in performance-based mobile marketing.
Email and Social
Both email and social will be crucial to mobile’s success next year.
At Matomy we’re seeing upwards of 50% of advertiser email opens coming via a mobile device. Many consumers will quickly scan an email on a mobile device and then make a purchase on a desktop or tablet device. Mobile marketers should pay attention to this trend and adjust their email copy and creative accordingly.
In social, we’re witnessing the beginning of performance-based mobile social advertising.
Twitter’s recent acquisition of MoPub means advertisers now have new mobile targeting capabilities to play around with on the social network. Twitter expanded those ad targeting capabilities even further in November by allowing marketers to now more granularly segment audiences on mobile (iOS and Android) by operating system version, device, and Wi-Fi connectivity.
Social will play an increasingly important role in performance marketing in the future (full disclosure: we made a social acquisition this year when we acquired Adquant’s social advertising agency in October). The combination of mobile and social is still maturing but you can already see the possibilities emerging. The ability to mix mobile’s real-time marketing capabilities with social’s customer engagement and emerging customer acquisition capabilities is a digital marketer’s dream.
Giuseppe Bellanca, business development director EMEA, MobileAppTracking
It’s time to move beyond the install
Until recently, advertisers have been largely chasing installs. The rising cost of installs means that advertisers need to focus now on what’s happening after the install. They need to look at multiple metrics such as LTV (lifetime value) and ARPU (average revenue per user) as well as customer behaviour to properly understand their CPA and identify where their quality users are coming from.
Quality internationalisation will be key to the Asian market
To compete in China, Japan and Korea, advertisers will need to ensure that native localisation is at the core of their marketing efforts, in order to maximise their advertising ROI. This includes in-app content, app store listings, and content for their marketing campaigns.
Mobile ad networks will begin to consolidate
The huge range of mobile ad networks, arbitrage and rise of real-time bidding means that invariably some networks will either disappear or be acquired by larger ones. Irrespective of how many networks there are, advertisers should use advertising attribution that can differentiate between multiple publisher sources and will also mitigate against paying for multiple clicks that are attributed to a single user.
Chat apps steal the social limelight
Recent data shows that young people are migrating from Facebook to the new breed of chat apps such as Line, WhatsApp and WeChat. And where customers go, advertising will surely follow. We can therefore expect significant investment in social media advertising above and beyond Facebook and Twitter.
Programmatic buying continues to rise
With the mobile advertising industry expanding as well as becoming more sophisticated, programmatic buying and campaign management will be more prevalent as mobile advertisers demand technology that can help scale their campaigns.
Francis Bea, content marketing manager, Appflood
The rise of China
There’s plenty of discussion about the mobile advertising trends in 2014, from the encouraging prospects of video advertising on mobile taking stride this year – in part thanks to Facebook and Twitter’s jockeying for a piece of the pre-roll video ad and TV dollar action – to RTB and location-based targeted advertising on mobile devices.
But I think the bigger picture here, which ad industry insiders are just beginning to come to terms with (not to mention embracing), is the emergence of China: a brand new player in the mobile space, who publicly took the reins of the mobile tech industry starting in 2013.
Chinese tech companies toward the end of 2013 had been allocating their ad budgets into mobile and increasingly funneling the budget into campaigns for acquiring mobile users. However, with Chinese developers’ mobile ad spend increasing exponentially – they surpassed the U.S.’s mobile ad spend by September 2013, according to AppFlood’s Q3 2013 report – the trend here is symptomatic of the global influence that Chinese tech companies will have in 2014. As they outspend other nations in an effort to propel their apps into the forefront of the global tech scene, Chinese developers’ UA decisions this year decisively impact the global app economy. For instance, South East Asia and even the Middle East are increasingly becoming hot target regions for acquiring traffic, thanks to the Chinese developers that are investing more of their mobile ad budgets into these regions.
Ythan Pratt, digital marketing specialist, NativeX
Small Developers Will Rely More Heavily on Publishers.
It’s getting harder and harder to self publish mobile games. Indie developers are going to continue to need bigger marketing budgets to compete and the they¹ll get it from publishers.
Subscription Billing Will Become More Relevant
We¹re already seeing Kabam and Glu successfully sell in-app subscriptions
on Google Play to stabilize the sale of virtual currency. Based on early figures on Google Play, look for more game developers to offer in-app subscriptions on the Apple App Store in 2014.
Games Will Serve Better Ad Formats
Large publishers like SEGA are already testing new native ad formats in their flagship games as they take them free-to-play. In 2014, smaller indie developers will follow close behind, pushing the boundaries of what¹s possible for mobile advertising.
Wait on Wearables
There won’t be any meaningful game revenue generated from wearables in 2014, so don¹t waste your time developing for them. The time will come, but I don¹t expect it for another 2-3 years.
Social media advertising will continue to evolve and get smarter
Prominent social media platforms like Facebook, Twitter, Instagram and Snapchat will use 2014 to experiment a variety a ways to monetize on mobile. Each will find its own niche in-terms the type of ads they want to offer and how they will differentiate themselves from each other. Facebook’s app download format has been a major source of revenue for the social media platform – targeting and conversion strategies will continue to gain strength as Facebook integrates more big data elements into its ad formats. Twitter is also realizing the possibilities of expanding its ad platform to all marketers.
For now only a handful of 3rd party clients have had access to Twitter’s advertising methods but as the platform continues to add more advertisers the social media brand could bring in a significant amount of revenue. Instagram also rolled out ads for the first time near the end of 2013. Currently, only a selection of brands are allowed to be active, including Burberry, Lexus and Macy’s. A brand’s success when advertising on Instagram will rely a lot on how they approach their ads creatively as well as their messaging. Instagram will continue to build tools to allow brands to personalize their ads and creatively display their brand’s stories.
Finally, Snapchat will also create its own ad format within 2014 to develop ways to monetize its application. Snapchat currently shares 400 million snaps each day which surpasses the photo-sharing activity on both Instagram and Facebook. There are many pioneering brands small and large across different industries that have set out to experiment within the Snapchat space. They have created an active Snapchat account and are collecting a database of ‘friends’ to distribute content and messaging. Even though Snapchat doesn’t offer an ad format it is apparent that Snapchat is a great place to 1) develop brand affinity through relevant content blasts 2) create buzz by unveiling and promoting new products 3) drive transaction by providing coupons or offers. The effectiveness of each opportunity is still to be determined as brands continue to grow their presence on the platform and learn from their experiences.
Meaningful implementation of big data within ad formats
As marketers continue to realize the value ‘big data’ provides they spend more budget and effort on tracking customer data internally. 2014 calls for a revisit in the way marketers comprehend and utilize data – but beyond just understanding it marketers will start to implement it more tactically when making business and marketing decisions. The vertical that can be the most interesting to impact is retail. Mobile analytics are able to provide a comprehensive view into tracking lower funnel and shopping behaviour. These can be extracted into trends that will eventually be used to guide the direction and success of future mobile marketing efforts. Shopper data can then be used to interpret the actual impact of large scale campaigns within a customer’s path to purchase. Marketers can also develop an understanding of the most influential points within a customer’s purchase journey. Currently location data seems to be the most popular but the trick will be to build upon this and develop targeting that takes into account multiple layers of user data to serve the right message to the right person at the right time.
So, according to our experts, it seems the overall story of 2014 will be maturation, as the mobile ad industry hopefully begins shedding some of its dodgier practices, leaving behind some of the runts of the litter and consolidating, while moving away from the ‘install goldrush’ toward a more nuanced and altogether more value-driven way of measuring campaigns. If such predictions do indeed come true, 2014 should mark the beginning of a more healthy app ecosystem in the long run. Add to that the impact of big data on mobile marketing, the potential blossoming of opportunties for app promoters in China, as well as the increasing impact of Chinese marketers on the global app marketing industry, and you’ve got a pretty interesting year ahead.