Posted by & filed under Marketing, Measurement, Mobile, Technology.

The CPM is a wonderful metric – terrific for translating advertising impressions into clearly defined costs, making it simple to compare average expenditures by channel, publisher, daypart, demo… you name it. While looking great on spreadsheets, no doubt to the delight of accountants everywhere, CPMs in their current form are absolute poison to emerging mobile advertising efforts.

Right now mobile advertising impressions are typically bought and sold just like their digital display brethren using parameters such as potential audience size, demo, content type, etc.

Unfortunately, this approach forces Mobile CPMs to be viewed through the same restrictive lens of exposure-centric media such as digital display, TV, radio, print, etc. For example, CPM caculations from KPCB (using comScore data) put average mobile CPMs at roughly a fifth of desktop CPMs, ($.75 vs. $3.50).

Frustrating, and more importantly, meaningless. Such CPM comparisons convey a false monetary equivalency, masking mobile’s rapidly evolving role of connecting brands with consumers.

Time for a Mobile Marketing Reset

As smartphone use just eclipsed feature (basic mobile) phones earlier this year, 2012 is  YEAR ONE of the real mobile marketing era in the U.S. Mass market consumers are just now experiencing the content, commerce and social capabilities of powerful 4G-friendly mobile devices such as the iPhone 5, GalaxyS III, Google Nexus series, iPad, etc.

Smartphone-penetration

Smartphone dominance combined with accelerating 4G adoption will cause a tectonic shift in U.S. mobile activity (video, commerce, etc.) nothing short of the digital awakening consumers experienced switching en masse from dial up to broadband. This time, however, both user and device will be untethered by location. Markets like Japan and South Korea have already experienced this consumer shift. According to NTT DoCoMo, LTE smartphone users consume nine times more data than 3G users. We are next!

We are already seeing the early signs of a similar U.S. shift . According to NPD in August 2012, Android platform users spent 20% more time on their smartphones daily (over 4 hours) compared to in the same month last year (3.5 hours).

Need more proof?

– Mobile video use is way up (and music category is #2) – Flurry

– Nearly 70% of consumers plan to use their mobiles for holiday shopping in 2012 AND smartphone users will spend 72% more for gifts (avg. $1,428) vs. basic phone users – Deloitte Holiday Shopping Survey 2012

Enter the REAL mobile marketing revolution! Organizations with an already large mobile footprints such as Pandora, Facebook, Zynga and several others sit at the center of this mobile consumer awakening. For example, over 75% of all Pandora user activity already comes from smartphones; it’s 80% if tablets are included.

Post holiday season into 2013 and beyond, mobile marketing prospects will only get better. According to Statistica, by 2016 4G penetration in North America will reach 42%, up from 7% in 2012. By then a near majority of U.S. consumers will be 4G mobile savvy, both economically and socially.

Putting Mobile Valuations into Context

“Mobile should be considered less an ad platform and more a marketing, communication and sales channel.” – Henry Blodgett, State of the Internet 2012 

Compare mobile time spent in 2012 vs. 2011 on shopping, music, games (not to mention all the additional minutes on messaging and voice services).

Smartphone-time-in-minutes

 

Part media, part social, part commerce, etc., smartphones, tablets, and related connected devices represent a technological extension of ourselves, a constant companion going wherever we go. For many users, device-centric interactions are the first and last things we do everyday. Considering their ‘persistent’ presence in our lives, it makes ZERO SENSE to value mobile through the limited lens of online display.

Shifting mobile perceptions (and related CPM valuations), as Blodgett suggests, to a marketing, communication and sales channel, requires an acknowledgement of context, specifically CONSUMER context. Consider consumer context as the ‘mobile mindset’ of users when confronted with specific events, situations, needs, desires, etc., no matter the time or location.

Utilizing mobile, marketers should first enable and then fulfill consumer needs, addressing the where, when and why they occur. Consider the following scenarios of consumer context:

  • Exiting the office, close to lunchtime and hungry
  • Car shopping, just left the showroom without a purchase
  • Wine enthusiast unknowingly walks passed best wine store in town
  • Out with friends, eating dinner and now deciding (arguing) movie options

Per each example above, consumer/brand interactions via mobile when planned, delivered, and evaluated based on the context of location, time and user intent will deliver higher-value performance outcomes for marketers. Framing mobile CPMs without factoring in context masks mobile’s true benefit for consumers and ultimate value to marketers.

Similar to digital’s early days, the advertising market typically lags a bit behind consumer behavior. Smartphone dominance and growing 4G penetration will accelerate the sophistication of US mobile consumer base creating a new wave marketing opportunities for brands.

To make this happen in the near term, we need to collectively push aside existing CPM valuations and rethink the role of mobile for marketers, coming up with new ‘multidimensional’ success measures incorporating device use, consumer interactions, and campaign benchmarks. As an industry, this means mobile CPMs should be based on consumer context, not just simply exposure, ultimately delivering a more relevant measure of campaign performance and marketer value.

If not, we risk waiting YEARS before mobile takes a commanding role in the marketing mix versus existing traditional and digital marketing platforms.