Mobile predictions for 2010

Brought to you by Noah Elkin

It's amazing how quickly we return to the hyperbole (emphasis here on the "hype") of yore. Google announces it plans to buy AdMob for $750 million, and the next thing you know, we start hearing that next year is the year of mobile. This is hardly anything new: Industry boosters have perennially declared the year of mobile every year for the past decade, and somehow it never quite works out to be the year of mobile. Next year promises to be no exception. In fact, we'd all be better off reinstituting the moratorium on declarations of the year of mobile in favor of focusing on the serious work marketers need to do to bridge the gap with mobile consumers.

The outlook for mobile is still positive, mind you, but it's possible to have steady, even solid growth without the need for any "year of" declarations. After a decade or more of unfulfilled expectations, we can say with near-certainty that, Google or no Google, mobile advertising and marketing are not going to "explode" next year or even the year after. Instead, mobile will continue to grow incrementally as more brands and agencies fold it into their marketing mix, a trend I pointed to in my recent outlook for mobile advertising.

At the same time, it's also worth remembering that there are two sides to any marketing equation: the marketer and the consumer. On the marketer side, the AdMob acquisition comes at a time of renewed enthusiasm for mobile. A case in point is Millennial Media's recent "state of the industry" study, conducted in conjunction with online knowledge base DM2PRO. The study highlighted two key trends for 2010: more marketers planning on employing mobile advertising in the year ahead, and bigger budgets, especially among the brand marketers surveyed.

The vast majority of respondents to the Millennial/DM2PRO survey also indicated that the mobile campaigns they've run performed at least satisfactorily against campaign goals, although brands and direct marketers were more apt to say their campaigns exceeded expectations and publishers were most likely to say they underperformed. Overall, though, this is a positive finding -- it shows that mobile is working for brands, agencies, PR firms, and publishers alike.

Yet, many respondents, including both marketers and publishers, classified themselves as "non-mobile." Most cited a lack of resources and a lack of knowledge as their primary barriers to entry. Nearly half of the publishers and a little more than one-quarter of the marketers who declared themselves to be non-mobile said the availability of reputable data demonstrating positive ROI would encourage them to adopt mobile advertising. These results suggest that even with all of the positive momentum in the mobile space, gaps still exist on the marketer side.

A mobile divide persists among consumers as well, although it is closing rapidly as mobile users voraciously upgrade to ever more capable smartphones. The NPD Group noted recently that more U.S. consumers have mobile data subscriptions than last year, and the Yankee Group's November 2009 "Mobile Commerce for the Holidays" webinar likewise indicated strong consumer demand for multimedia smartphones with data plans. Similarly, the third wave of BIA/Kelsey Group's "Mobile Market View," an annual mobile consumer study, found significant growth in both mobile internet usage and more "advanced" behaviors such as video viewing, purchasing, and sending.

The more relevant gap that persists is the one between marketers and consumers. As consumers' usage of mobile devices has grown more sophisticated, their attitudes toward mobile marketing have become more negative. BIGresearch's "Simultaneous Media Usage" study indicates that relative to last year, more consumers now dislike receiving text ads, video ads, and text voicemail ads, and more feel that mobile ads constitute an invasion of privacy.

These are not positive findings for marketers, but they beg the question of cause. It's tempting to chalk it up to familiarity breeding contempt, but that seems too simplistic an explanation. When asked directly about their attitude toward advertising in any channel, consumers routinely respond negatively, so more likely, it is a function of the ongoing disconnect between consumers and the marketers trying to reach them.

Marketers can take heart from some of BIGresearch's findings, namely that the percentage of adult consumers who feel mobile ads can be helpful in making a purchase and are acceptable as long as they get content in return both remained stable, dropping by an insignificant 0.3 percent year-over-year. Within this sliver of hope lie the keys for marketers. To succeed in mobile, they will need to provide consumers with a measure (and measurable degree) of utility, relevance, and entertainment.

So let's pause to celebrate the strides mobile has made, but let's also build on the momentum. There's still plenty of work to be done, gaps to be bridged, and problems to be solved before we truly reach that oft-promised year of mobile. With much on the agenda, it's safe to say that 2010 promises to be an exciting year for mobile.

Noah Elkin is a senior analyst at eMarketer, where he covers trends in mobile marketing, content, and commerce.