Mobile Advertising trends that will rule 2013

We were right on the money when we predicted the key mobile advertising trends in 2012. As consumers rapidly adopt mobile, here are the Top 5 trends and take centre stage in 2013:

Matrix Software

Mobile Advertising

1. Smartphone advertising will evolve to Smart advertising

Advertisers today are adapting their campaigns to the capabilities of smartphones. Also many of them are only leveraging 1 or 2 smartphone platforms v/s the broader mobile ecosystem. However, as the medium continues to grow rapidly in 2013 and demonstrate its potential as the most powerful Mass Media, advertisers with a smartphone only strategy will miss out on a large chunk of consumers present on other mobile platforms. Mobile Internet enabled feature phones still dominate emerging markets (80% penetration) and even developed markets like USA have 45% penetration. Advertisers will have to invest time evaluating the mobile habits & behavior patterns of users to create smart campaigns that will connect with consumers, irrespective of which mobile platform he uses.

2. Developers will blend In-App purchases with Ads based revenue in parallel

Developers using the classic in-app purchase model to monetize are seeing that only 5-10% of their app users convert into paid transactions. With an increasing number of app users coming from emerging markets, this conversion rate will further reduce – as while emerging markets have a high mobile penetration, the GDP per capita is much lower & credit card penetration is only in single digits! Developers will have to take urgent action to monetize the remaining 95% of their app user base by plugging into telco billing for micro-transactions and using powerful mobile advertising solutions. 2013 will see such premium apps come into the mobile advertising foray and advertisers will benefit from being able to target the premium audience of these apps & games.

3. Telcos will try to get back into the Mobile Advertising space

Back in the day, Telcos were slated to have a significant stake in the Mobile Advertising ecosystem. However, as consumer’s data usage shifted from Telco owned ‘on-deck’ wap portals to the broader mobile internet sites and apps; it looked like the Telcos missed the Mobile Advertising bus. However, it is clear that Telcos are still looking to get back into the game, and cash in on the mobile advertising opportunity, especially in emerging markets. Leading telcos have already made their moves by getting significant stakes in mobile advertising companies. Others such as Airtel have started their own foray with m-Advertising platforms. In 2013, we will see more telcos scouting for viable opportunities and partnerships to participate in the rapidly growing mobile advertising industry.

4. Windows Phone 8 will not stop Android’s “mass market” smartphone momentum

Windows Phone 8 launched in Oct’12 amidst a lot of fanfare, but given it’s high minimum hardware spec requirements the devices that use it are likely to be only mid or high end in terms of pricing. Android devices have been around for over 4 years, giving it a considerable head-start and penetration with OEMs. Everyday over 1.3 million Android devices are being activated, with majority of them being priced for the “mass market”, and in 2013 Android will cross an installed base of 1 Billion users. On the other hand, 2013 will be the first year of Windows Phone 8 platform and its focus will be to first make inroads in the high end segment, which itself is a herculean task given the head start iOS & Android have. Windows Phone 8 may over time bring down device prices by working with partners, but it is unlikely to happen in 2013.

5. Consumer’s mobile lifestyle will allow Brands to converge advertising, distribution & transactions!

Mobile is fundamentally altering consumer lifestyle today – changing how we live, work & play! Over the past few years brands have tried to integrate mobile as part of their overall media mix. In 2013 brands will have the opportunity to take it to the next level – of leveraging Mobile for all the 4Ps of Marketing! Marketers are now realising that mobile is ‘place-shifting’ purchases – i.e. purchase decisions are not happening at a physical store but in the palms of the mobile consumer. Combined with the micro transaction capability of mobile, m-coupons can alter the pricing paradigm with hyper-segmented offers! As more and more consumers use their devices for making purchase decisions they traditionally made offline, the lines between advertising, distribution and transaction will blur.