The Funnel Grows; the Funnel Shrinks, Mobile Ads Get a Lot More Interesting

As we prepare for AdWeek next week, I’m looking forward to long conversations about the future of mobile marketing and advertising. (Be sure to catch the Mobile Ad Summit on Tuesday where you’ll hear a lot on the subject: ) The context has me thinking just how much mobile advertising has changed in the past year. In particular I think we have seen a radical expansion in the way our old friend the Marketing Funnel is treated in Mobile. So here are some things to think about leading up to next week.

Marketing FunnelThe Marketing Funnel

The marketing funnel is easy shorthand for matching one’s marketing objectives with one’s marketing strategy. A web search will reveal a wealth of different version of the famous funnel, so I’ve mashed up the one below from some of the best sources. It used to be if you wanted awareness you bought television; if you wanted conversion you bought coupons. Loyalty? Remember Green Stamps?

Good marketers (well to be fair… even bad marketers) are always looking for effective and efficient ways to drive every point of the marketing funnel. While mobile marketing should be no exception it is only recently that we’ve seen the funnel both expand and simultaneously contract. Lemme ‘splain.

In the first phase of mobile marketing much of the marketing focus had been on driving mobile intent and conversion, through search and performance txt and banner campaigns for the likes of big spenders in the ringtone and games business. Let’s call that Mobile Marketing 1.0. Admob and Quattro cleaned up on this wave especially as apps hit the market and people would, and still do, pay for app downloads. AdMob and Millennial Media have a firm grip on this part of the funnel today.

What’s happening now is high-capability devices are driving interesting effects on the funnel, simultaneously expanding and collapsing it for different programs and objectives.

The expansion of the funnel is coming from a clear increase in the amount of dollars being spent on the top of the funnel from “awareness” on down. Awareness budgets are television sized budgets designed to drive brand, well, awareness, as well as positive perception of a brand that will eventually drive purchases. The introduction of iAd and what we’ve seen at Transpera, with the branding power of video to elicit emotional responses on products, are a new opportunities for marketers to use mobile as a super efficient and effective way to address top of the funnel marketing objectives. This is a big expansion in the funnel for mobile, and a big opportunity for mobile marketers, advertisers, vendors and publishers. Not only have rich branding campaigns on mobile blown up this year, the engagement and efficiency of such campaigns on mobile indicate that we’ve barely seen the start of the spending flow.

Ironically at the same time rich media services like ours are expanding the funnel, location based services are collapsing the funnel by more intimately connecting awareness, conversion and loyalty. Think about what foursquare is really doing with its audience. It is providing a physical connection to the world of loyalty. Now people actually compete to be the Mayor of the American Airlines Admiral’s Club. Those are leagues of true believers! What is so powerful about location marketing is that someone can become aware of a brand, there is a Diesel Jeans store near my office, while simultaneously being fed an offer to convert, Diesel is having a sale, and, as is the case with foursquare, check in at that location and start a loyalty relationship. This is the funnel collapsing into a single marketing relationship that can drive multiple objectives.

Both these phenomena will steal dollars away from traditional media. The expansion of the funnel with mobile brand advertising will steal dollars away from television, and the collapse of the funnel with location based services will steal even more money from the Sunday inserts. And all of our combined services are why we haven’t even seen the beginning of what the mobile advertising market is going to be.

– Frank


About Frank Barbieri
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