MMA Whitepaper: Mobile's Share of the Mix - Marketing Evolution
August 1, 1999
Marketers currently allocate less than one percent of their marketing budget to Mobile advertising. However, based on sophisticated return on investment (ROI) analysis of Mobile, the optimized level of spend in Mobile advertising for U.S. marketers is seven percent, on average.
Over the next 4 years, Mobile’s share of the media mix is projected to increase to over 10 percent based on growth in adoption of smartphones only. It is safe to say, however, that the growth does not stop there. As with all new media, more effective targeting, creative excellence, better ad units, tighter industry standards, innovation in technology and other factors will all contribute to increased spend and the further establishment of mobile in a marketer’s mix.
The following MXS white paper will present findings that support this conclusion based on a scientific ROI analysis vs. the simpler “share of time (should) equal share of budget” proxy that is often offered in lieu of ROI optimization. Marketing Evolution’s recommended mix is based on the best available empirical data and proven ROI measurement. The analysis demonstrates how combining datasets on ad impact and cost, in the context of reach and frequency provides a powerful framework for predicting ROI, and rebalancing the media mix to optimize marketing impact.
Additionally the data suggests that the range marketers should spend on Mobile varies based on the marketing goal and industry category. Regardless of these variances, it’s clear that marketers are spending significantly less than they should in Mobile and by settling for a sub-optimal media mix are losing out on sales and profits.
Consumer media habits are rapidly changing – the penetration of mobile smartphones has skyrocketed and it is clear that Mobile has proven to be effective in successfully achieving a variety of marketing goals. Even though these facts are indisputable, marketers have been slow to adjust and rebalance their media mix to reflect consumers’ mobile-centric world. In fact, it is appropriate to assert at this time that most marketers should significantly increase their investment in Mobile advertising. While this may be a bold statement, it is a statement based on science and mathematics; it is rooted in what we quantitatively know about all media’s impact as well as Mobile’s impact and penetration to date.
Based on this information, Mobile advertising (display, video, audio) should be at least an $11 billion dollar market in the U.S. and higher globally assuming similar dynamics exist worldwide.
About Marketing Evolution
Marketing Evolution is a full service provider of custom marketing ROI management and optimization solutions. It is the only company in its field that can measure cross-media ROI impact in “real time” and then fast-forward that learning into the most comprehensive set of planning ROI management tools available to marketers today. Measuring ROI is about understanding cross- media performance at a given point in time. Managing ROI is what’s done with that information going forward. To address these challenges, Marketing Evolution has two award-winning ROI measurement / management platforms; ROMO (Return on Marketing Objectives) and Matterhorn, a custom planning simulator. For more information on Marketing Evolution, please visit us: www.marketingevolution.com.