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(Re)Defining the Mobile Market



By FOLIO: Staff
05/02/2014

 

The audience stampede to the mobile platform has been well documented. Most recently, an eMarketer report noted that mobile will overtake the online category in share of time spent on media consumption in 2014. Accordingly, publishers are seeing the results in major traffic and engagement activity on the platform—with some declaring a "mobile-first" strategy, just has they had with "digital-first" not that long ago.

But business models, content production and advertising are still being figured out, especially as publishers and marketers begin to understand the fundamental differences between tablet and smartphone use. So, while activity is ubiquitous and constant, the marketing spend and back-end technology, while rapidly developing, has yet to catch up.

To explain how this dynamic is playing out on the front lines, FOLIO: convened a group of mobile executives at publishers and agencies to provide some much-needed insight. Their comments shed light not only on how crucial mobile has become for publishers and brand marketers, but how nuanced the platform is in terms of audience engagement and experience.

1. Are tablets dead? Should the emphasis be placed on phones? Why or why not?
Tablets are only dead for the publishers who were hoping that they would somehow put the genie back in the magazine bottle. While they can't do that, they remain a big part of the user mix. Publishers who think they can deemphasize an important part of the digital mix do so at their own peril. In the long-run, it is too limiting from a business standpoint to be focused on a single digital channel.

2. What have you learned about your mobile audience in relation to the other brand platforms? Did you have any assumptions that were proven wrong? What has surprised you about your mobile audience?
The fun part of mobile is that it still the early days. Something new surprises us every month.

I think one big misconception is that people won't intentionally engage with ads on their phone. We've designed our email newsletters and the related ad spots specifically for mobile devices. These units have turned out to be surprisingly effective for lead generation. Some folks will try to dismiss these as "fat finger" clicks but, when sent to mobile optimized landing pages, we've seen that people are willing to register for webinars and downloads. Frankly, I've been shocked by how strong the results have been for advertisers.

3. Why hasn't mobile advertising caught up with audience adoption and usage rates?

I don't know and, in many ways, I don't really care. We all know how this is going to end. The print to web transformation showed us the roadmap.

As an industry, we spent the last ten years asking the same questions about digital revenue: When will it catch up to user adoption? When will it match print? The folks who used this uncertainty as an excuse to sit on the digital sidelines were passed by. The same will happen with mobile. Even if advertising never catches up to user adoption, we are all in the mobile media business now. We have to build our businesses around it.

4. How has mobile either fit into your current business model or changed it? Or does it have its own business model? Explain.

Mobile doesn't just fit into our current business model, it is the business model.

We launched Industry Dive around the belief that the rise of mobile presents an opportunity for new entrants to enter niche b-to-b markets. As a relatively new start-up, a focus on mobile experiences for both users and advertisers is how we can compete. That doesn't mean, however, that we publish exclusively on mobile. We still have websites, email, and all the other products that other digital publishers have. We just always start with the phone and work backwards from a content, design, and technology standpoint.

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1. Are tablets dead? Should the emphasis be placed on phones? Why or why not?
Tablets aren't dead but the market does appear to be maturing. Today, 75 percent of our mobile unique visitors on The Atlantic are on phones and the segment is growing rapidly (5 to 10 percent month over month). From a product perspective at The Atlantic, we're putting more emphasis on phones because the audience is bigger and the usability challenges are greater.

2. What have you learned about your mobile audience in relation to the other brand platforms? Did you have any assumptions that were proven wrong? What has surprised you about your mobile audience?
There used to be a general belief that people on small screens were not interested in reading long content-that content consumed on phones needed to be "snackable." On the contrary, I've seen time and again that content length is a poor predictor of what works. In fact, some of our longer pieces have a higher than average percentage of mobile views.

3. Why hasn't mobile advertising caught up with audience adoption and usage rates?
Size matters! I think mobile advertising has struggled to get traction in a world where "New and Innovative" can be synonymous with "Bigger." Standard ad sizes for small screens aren't sexy-it's difficult to have a "high impact" unit that's 50 pixels high or a direct tradeoff on the content experience.

Historically, we've seen advertisers much more interested in tablets than smartphones, but scale is an impediment to growing revenues on tablets alone. It's one reason we've spent a lot of time developing our sponsor content experiences on mobile. Great native content works without being dependent on standard ads.

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1. Are tablets dead? Should the emphasis be placed on phones? Why or why not?
At ALM, we've found that today's mobile success is mostly coming from smartphone users, but recognize that tomorrow's success will come from tablets as well. Tablet penetration is still nascent with only one in every 17 people owning a tablet today versus one in 5 owning a smartphone. As the proliferation of lower-priced tablets continues and capabilities continue to be enhanced we'll see an accelerated shift from PCs to tablets and overall tablet share of media time increase.

I believe, the biggest tablet opportunity for publishers is in launching digital editions to extend the print experience onto digital devices. I've seen first hand how readers flip page-by-page through these editions, stopping to admire ads and interact with them. Additionally, readers see these experiences as valuable products and readily open up their wallets to get access.

2. What have you learned about your mobile audience in relation to the other brand platforms? Did you have any assumptions that were proven wrong? What has surprised you about your mobile audience?
The biggest surprise for me was the absolute domination of the iOS platform in terms of usage-with more than 85 percent of ALM's mobile audience reading their legal news on an iPhone. Otherwise, our audience is pretty typical. Our app users have the highest engagement metrics with more visits and page views per session while our mobile website users have less page views per session but a high frequency of visits relative to online readers.

3. Why hasn't mobile advertising caught up with audience adoption and usage rates?
With fewer ads per page (sometimes only one), mobile advertising is a more effective medium than online; that said, many advertisers don't realize the full potential of mobile for a variety of reasons. First, with more limited real estate the messaging and creative has to be even "smarter" (i.e., merely running a campaign that says the name of the brand, while providing branding opportunity won't lead to great leads).

Second, many brands, especially SMEs still don't have great mobile web presences or are building campaigns with landing pages that aren't optimized for mobile at all. The incremental work of building unique mobile campaigns is holding back some advertisers and the mobile ad industry.

4. How has mobile either fit into your current business model or changed it? Or does it have its own business model? Explain.
We are digital-first publisher and have a mobile-centric product orientation. We recognize that the first device that our readers turn to in the morning is either their smartphone or tablet, and execute against a mobile-centric product roadmap in 2013.

Today, the number one traffic driver to our sites is our daily editorial eNewsletters, and the majority of these readers are perusing our newsletters on their mobile devices. We integrated mobile into all of our offerings and are 100 percent mobile-optimized and lead with all of our product offerings as "anytime, anywhere." Additionally, for advertisers we sell the expanded audience of mobile as a cross-platform buy, integrating online and mobile (and sometimes even print) into our sales packages.

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1. Are tablets dead? Should the emphasis be placed on phones? Why or why not?
We are seeing strong growth in visitation and orders from tablets to our web subscription offering, and we believe there are unique use cases: Consumers will use us as both a news and research source to keep current on products, trends and issues so a tablet experience lends itself well to that. In a retail context where 80 percent of all product decisions are still made, we find that consumers want easy and direct access to our ratings and reviews content so the phone works well for that purpose. We plan to continue playing to both needs.

2. What have you learned about your mobile audience in relation to the other brand platforms? Did you have any assumptions that were proven wrong? What has surprised you about your mobile audience?
We basically sell two separate subscriptions: One for the magazine and one for ConsumerReports.org. Because our magazine audience skews older, we have seen moderate success with our tablet magazine app but the print model remains preferred for much of that subscriber base. Our web subscribers-who are typically over a decade younger-exhibit increasing mobile usage on par with industry ratios. The percentage our audience using mobile devices grew from 22 percent last year to 38 percent this year, and almost 20 percent of our new orders now come from a non-desktop browser-up from 12 percent last year.

3. Why hasn't mobile advertising caught up with audience adoption and usage rates?
We don't sell advertising at CR, but I've learned from prior experience that robust ad markets need both engaging in-ad experiences and a creative format that is scalable with economics that work for both publisher and advertiser. Therefore, you might see cases where a premium publisher can sustain highly custom tablet ad experiences that pencil for their advertisers, and others where mobile ad networks might be the only sustainable option. The OPA has research indicating that advertising may be more impactful with mobile users who pay for content so some publishers may find opportunity there.

4. How has mobile either fit into your current business model or changed it? Or does it have its own business model? Explain.
It's fitting into our business model now, but adding new dimensions to it. For CR there is both an emerging mobile challenge (increased share of audience at a lower conversion rate) but also an opportunity in that the younger adults who we're trying to reach tend to rely on mobile devices more for internet access. As we discover how to best engage these newer audiences, we might find new revenue models as well.

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1. Are tablets dead? Should the emphasis be placed on phones? Why or why not?
We look at the arc of the day and how the consumer is interacting with media throughout her day. We see a definite peak in desktop usage during the day, while the mobile device is on all day, but it's often accessed in those opportunistic moments like waiting on line or in an elevator for a functional use like writing an email.

We don't see the tablet as dead at all. It's being used independently or as a second screen at home in a much more lean-back experience. [Adoption] has been a little slower than we expected, and it's increasing, but I think the alternatives available to the consumer have impacted the rate of adoption. She has so many options and she's choosing which one suits her at whichever moment or wherever place she might be.

2. What have you learned about your mobile audience in relation to the other brand platforms? Did you have any assumptions that were proven wrong? What has surprised you about your mobile audience?
When we first started we thought it'd be a linear experience where you start on your desktop and move to mobile. Looking at a food experience, for example, you'd see a wonderful recipe on your PC and you'd save it to a shopping list on your phone which you'd take to the store.

While that happens in many situations, we're also seeing a really big group of exclusive mobile visitors independent of having been referred from the desktop. That's definitely surprised us. On All You, 65 percent of our total digital audience are exclusive to mobile. On MyRecipes, it's 50 percent and on Cooking Light it's 51 percent. That was pretty surprising to us when we hit that watershed moment when over half the visitors were unique to mobile.

3. Why hasn't mobile advertising caught up with audience adoption and usage rates?
Without oversimplifying, things don't move so quickly in a world created around process. To incorporate a new piece of the process is not as easy as you might think.
When digital was first becoming an option for marketers and advertisers, they'd ask for digital as added value. It was new, they didn't know how to measure it, they didn't know how to buy it, but they knew it was there so it showed up as a question on an RFP.

Like digital used to be, mobile has come upon us so quickly that we don't yet have a formal process of how to buy it.

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1. What have you learned about the mobile audiences you reach in comparison to other platforms? Did you have any assumptions that were proven wrong? What has surprised you about the mobile audience?
How much time do you have? We've learned a ton. The depth of behavioral change is amazing. One thing that's jumped up in our industry is the redefinition of the mobile category, as we saw in a study last year that showed two-thirds of mobile phone usage happens at home. So, is it mobile? I personally think it's something different. I also don't think its the ‘third screen,' as a TV-centered generation has affectionately referred to it, I think it's the first screen. It's the first and most frequently used screen in our lives.

2. Are tablets dead? Should the emphasis be placed on phones? Why or why not?
Tablets are most certainly not dead, but their future in the consumer space is probably more contained. The first wave of tablets were gobbled up by those with disposable income.

Conversely, if you look at the amazing sales chart of smartphones across the globe, the biggest growth is now among less affluent segments. Tablets aren't likely to see the same continued growth curve, given they will probably remain a nice-to-have option among less affluent segments. As we saw at CES 2014, the super cheap tablets are on the way, but I'm not sure the price will be able to reach the mark needed to justify having two functionally similar devices on a tight budget. The blurring of size and function among phones will only perpetuate that disconnect with pure tablets.

3. Why do you think mobile advertising hasn't caught up with audience adoption and usage rates?
Most smart marketers realize that the mobile experience is a uniquely personal one and they've been actively searching for a better approach than simply carpet-bombing the screen. Brand sentiment is much more fragile in the mobile space.

That's interesting is that these executions often take the shape of something that doesn't look or feel like advertising. Given that unique environment of the phone, we've tried to create experiences that consumers actually seek to engage.

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1. What have you learned about the mobile audiences you reach in comparison to other platforms? Did you have any assumptions that were proven wrong? What has surprised you about the mobile audience?
In thinking about mobile audiences compared to other devices, I think the biggest thing that pops to the forefront is that mobile is a very personal device. It's that one device that's really never shared. It's something that's almost part of you and almost always with you.

It really lends itself well to things like social activations, local activations and just really getting a user who is going to be receptive towards marketers that understand their needs. I think that is the case more than say desktops, where in a lot of cases they are shared devices-you have one at home and one at work, they aren't always with you when you are in active mode.

2. Are tablets dead? Should the emphasis be placed on phones? Why or why not?
No, I definitely don't think they're dead. I think we have gone through an evolution as far as what we think about tablets. When they first popped on the scene they were associated with a higher-end consumers with disposable income to spend-you know, a luxury market. We also lumped them into the category of mobile, like we're doing here. We eventually came to realize that the tablet user's activities really mirror more the desktop. We started to adapt our advertising to closely follow what we were doing on desktop and tried not to deviate too much from that. But I don't think it's going away; we are definitely starting to understand the deeper value of tablet.

3. Why do you think mobile advertising hasn't caught up with audience adoption and usage rates?
I would boil it down to quite a few things but the two most important things are number one: Our approach as marketers overall is to think about budgeting. When we think about the marketing landscape and all the channels we have at our disposal, a lot of times as newer channels emerge we try to carve out little pieces here and there from our previous channels to allows us entry. It's just not the best way of really being able to take advantage of each channel. We really need a zero-based budgeting approach where we can look at each channel and the value they bring.

There's also the secondary barrier, which is a huge one, the technology barrier. Mobile followed from online and we got accustom to all this rich data that we can leverage down to conversion. Mobile is just so far behind in terms of trackability and attribution. Digital mediums are held to higher standards, so the inability to tie it in a very consistent and effect way is what is preventing a of lot advertisers from embracing it fully.

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1. Are tablets dead? Should the emphasis be placed on phones? Why or why not?

Our focus is to be everywhere our consumers are. To us, it's not an either/or proposition; we want to give our consumers access to our brands in whatever way they want on whichever device they prefer. With tablets, it's now been four years since the first iPad debuted.

Since then, we've learned a lot about how and when consumers use tablets and what type of experience they are looking for from this device. Our development efforts on tablets are focused on maximizing those experiences. At the same time, capitalizing on the explosive growth of smartphones is key as more and more of our consumers are now accessing our brands on phones.

2. What have you learned about your mobile audience in relation to the other brand platforms? Did you have any assumptions that were proven wrong? What has surprised you about your mobile audience?

Like many brands, we're seeing the audience that comes to us on mobile is slightly younger, faster, and more active across social. Our initial assumption was that consumers were looking to mobile for information snacks-small, digestible amounts of news and information that they would return to frequently throughout the day.

In reality, what we saw was a quarter of our mobile audience spending more than five minutes per visit on mobile. Five minutes is a long time! This higher than expected engagement led us to bring more of our content, including video, onto mobile.

3. Why hasn't mobile advertising caught up with audience adoption and usage rates?

The first mobile ad formats weren't very attractive, and at that early point, incremental creative production to build those units was harder to justify. Now, with a move to fully responsive creative, a lot of those efforts can be streamlined. We are now seeing great traction in native advertising and video formats that are screen agnostic. So, as we look towards the future, it's more important than ever that ad formats go across screen.

 

By FOLIO: Staff
05/02/2014







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