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The new power equations of the mobile ad business

After several years of slow to medium growth, 2014 was finally the year in which mobile advertising came to the fore. What was also significant was the shift in the power equations from the traditional brand advertisers to companies which can best be described as ‘Mobile first and sometimes Mobile only companies’. These would include Commerce, Payments, Gaming & Mobile App type companies. As these companies see mobile as their most potent engagement and transaction channel, ignoring mobile advertising was not really an option for them.

I see this industry evolving significantly in this year and below are the Top 5 trends I would list out, that will define the growth of mobile advertising in the year.

  1. ‘Me’ marketing vs. ‘We’ marketing – The power shift in the category of mobile advertisers has created a significant onus on data and measurability. This will evolve significantly in the year through blending of usage, profile, context and purchase information to help customise marketing programs targeted to an individual (Me) vs. a Mass segment (We). Unlike the PC, the smartphone offers much greater context information about a user and blending it with traditional demographic, purchase and online-offline attribution information will create a never seen before accuracy and relevance for mobile ads. With inventory getting commoditised and freely available to all mobile ad companies, the winner in this race will be those platforms that successfully embrace this ‘Usable Data’ revolution.
  2. Mobile Advertising weds Mobile Commerce – We have historically had mobile advertising and mobile commerce being viewed as two separate industries. I believe that this is changing faster than what we have imagined and in 2015 we would see a lot greater collaboration between these two industries. With mobile increasingly becoming a sales channel, communicating to the most relevant audience and making them transact/buy are now two pieces of the same jigsaw which every marketer is looking to solve. I thus see a lot of developments happening which would make seamless the current transition of ads to commerce. Thus watch out for developments outmoding the current ad-commerce intermediary steps of launching apps, adding goods to carts and entering cumbersome payment information. It’s all about seamless simplistic payments and I think Apple Pay has already shown the way for things to come.
  3. Death of the Insertion Order (IO) – A bit exaggerated but I truly believe that we are soon approaching the death of the Insertion/Release/Purchase Order based mobile media buying. Today almost every site and app is making its inventory available on ad exchanges which advertisers through their trading desks/Demand Side Platforms (DSP’s) can bid on. This again is causing a shift in the balance of power from agencies to Technology platforms. In 2015, I see this trend becoming even larger with the bulk of the mobile ad buys being done over machines vs. being managed by people through manual IO type processes. This automation will thus create greater growth opportunities for the industry as smart companies will move to SaaS type platforms to trade and put their own engineering efforts to leverage data better and build ad experiences which are likely to create desired consumer response.
  4. Content becomes Advertising and Advertising becomes Content – We have seen two key trends which helped shape the growth of mobile ads in 2014 – the rise of Native Advertising and the rise of Branded/Owned mobile assets. Through both of these developments marketers are trying to seamlessly blend advertising with content. The Facebook/Twitter in-stream ads are the perfect examples of how socially relevant Native ad experiences can drive much higher response vs. traditional display ads. I see these trends becoming larger and a lot more apps embracing Native vs. Interruptive advertising. However, from a brand marketer perspective I see a lot more investments also happening to create custom bite sized content which is ideal for mobile consumption. If nothing else, the auto play video ads on the Facebook news feed will make this change happen faster than what it usually would have.
  5. Rise of the machines – With more data, automation and emergence of many good stand-alone platforms offering value to the marketer, his job is only getting more complicated. The mobile landscape has never really looked as complicated as it does now. To simplify this I see the emergence of end to end mobile apps and ad platforms which will help create a one view to the user and ensure that both public and private data clouds of the enterprise are being leveraged to create the best audience and attribution understanding. I don’t really expect agencies or trading companies to come up with such platforms but such innovations would come from companies who are traditionally looked at as Consultancies, IT companies or in all likelihood the stand alone Mobile platform companies.

In addition to trends mentioned above, Wearable Technology is another trend for which I see a lot of hype around. However, I don’t really see it changing mobile marketing this year and may find a very important place in a similar article written next year.

Also it’s important to note that dramatic growth in any industry leads to a change in the balance of Power and this year will see much more of that happening in the mobile ad industry. From brands to commerce companies on the Demand side, from agencies to platforms in the intermediary side and from internet companies/agencies to mobile platform companies in the end-to-end solutions side.

So fasten your seatbelts and brace yourself for an exciting and high speed ride on the mobile ad racetrack this year!!!

Anuj Kumar

Anuj Kumar, is the Co-founder and Managing Director of Affle, a Singapore headquartered Mobile Apps and Ads as a service (MAAS) platform company. Anuj has been a pioneer in the world of mobile ads having co-founded Affle over 8 years ago as a mobile ad driven start-up which has successfully navigated from running this business in the feature phone-carrier driven world to a smartphone-programmatic-platform advertising scenario of today. Prior to Affle, Anuj has had rich work experience in companies like ESPN Star Sports, GroupM Mindshare & JWT.