Boosting Spending on the Smallest Screen, But Not Too Much, Has Direct Impact

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Credit: Mobile Marketing Association

Marketers should spend more on mobile: Just ask the Mobile Marketing Association.

That claim is no surprise coming from the industry's trade group, and might even provoke eye rolls. But there's a key reason to believe the MMA, backed by its cross-device Smart Mobile Cross Marketing Effectiveness (SMoX) research, as the group's CEO, Greg Stuart, sees it: His board is made up of nearly two-thirds marketers -- including executives of Coca-Cola Co. and Unilever -- who have closely supervised and participated in the work.

Unilever, whose Magnum ice cream brand is the focus of the latest SMoX study, is putting credence in the results and putting them to use, said Luis Di Como, Unilever senior VP-global media, who sits on the MMA board. "We have advertisers. We have mobile players. We have Facebook as well," said Mr. Di Como. "We have a good industry representation."

MMA research has been vetted independently by the Advertising Research Foundation, Mr. Stuart noted. And its studies have been conducted with large panels of between 500,000 and 1 million consumers under the supervision of well-regarded marketing analytics firm Marketing Evolution.
The eight published SMoX studies to date, conducted since 2014 with such marketers as Walmart, Coca-Cola, Mastercard and AT&T, concluded that all the marketers would have fared better -- either selling more products or converting more customers -- by increasing mobile media's share of their media budgets to the 15%-to-20% range from 5% to 9%, Mr. Stuart said.

Somewhat ironically, the one mobile player in that group -- AT&T -- had the lowest mobile share of spending going into its study, he said.

"Mobile is priced at half its value," Mr. Stuart said, based on the sales or conversion impact per dollar spent.

That's not to say the gains will hold up if marketers pile their whole budgets into mobile. Marketing Evolution CEO Rex Briggs has pointed out in numerous interviews and presentations that optimal spending on mobile tends to top out at much lower levels than other media, because it doesn't take as much frequency to make an impact as other media.

Saturation point
Mr. Stuart said a mobile video ad only needs to hit its target three times to reach "total saturation," versus a frequency of 12 to 15 for cable TV.

While it's not entirely clear why similar video advertising works and wears out faster in mobile than cable, it does raise questions about whether what counts as an impression is really equal between the media, and whether, for all the concern about digital viewability, concern should perhaps be greater about TV viewability.

Of course, comparing mobile and TV is also complicated by the relative complexity of mobile. Where TV spending comes largely on 15- and 30-second ads, mobile encompasses display, video, native and search with parameters that include place and time. Part of SMoX has been looking at optimizing budgets not just by total weight, but also by type of mobile creative and targeting variables.

Mobile Delivered About Twice the Impact Per Dollar Versus Other Media
AT&T: Awareness of Moto X Phone
Mobile: 1.9
Average: 1.0
Gold Peak Tea: Awareness of Gold Peak Tea
Mobile: 4.8
Average: 1.0
Mastercard: Image: Use of MC when traveling
Mobile: 1.7
Average: 1.0
Walmart: Sales in Store at Walmart
Mobile: 2.0
Average: 1.0
Unilever, Magnum: Sales
Mobile: 1.1
Average: 1.0
Coca-Cola (Brazil): Sales
Mobile: 3.0
Average: 1.0
Coca-Cola (China): Sales
Mobile: 2.0
Average: 1.0
Coca-Cola (U.K.): Sales
Mobile: 2.0
Average: 1.0
Source: SMoX: A Few Key Insights, September 2016. Photos courtesy of Coca-Cola, Unilever, Walmart, Mastercard and AT&T.

Optimizing by total mobile weight increased campaign performance -- either sales or other branding and conversion metrics -- by 4% to 12% (not counting a puzzling outlier from Coca-Cola in Brazil where sales rose a whopping 60%). But optimizing around creative type, location or other factors such as weather increased campaign impact 7% to 25%.

The impact in one unpublished study from Subway was even higher, Mr. Stuart said. Mobile ads that the fast-feeder ran between 11 a.m. and 1 p.m. had a whopping 14 times more sales impact than those run the rest of the day, he said.

For Mr. Di Como, the key takeaway from the SMoX study of Unilever's Magnum ice cream brand was that "context boosts content," he said.

The study looked at small and large bannerads and 15- and 30-second mobile video displayed mostly in apps from April to September 2015, using weather, location and time-based targeting. The study found increasing mobile's share of the media mix to 15% from the single digits would increase overall campaign profit performance 9%, and optimizing the creative and targeting within mobile would mean 17% of the media budget in mobile, with a 13% increase in profit versus the unoptimized mix.

Using weather-based targeting to only serve the ice cream ads when the temperature was 80 degrees or higher increased aided awareness of the ad by 14% and profit ROI on investment by 50%. The study also found larger banners worked better than smaller ones, and that while mobile video was as effective as cable TV per impression, cable TV was 2.5 times more expensive. In video, 15-second ads proved 27% more effective than 30-second ones.

Rich-media surprise
But the most effective format actually was rich-media display -- a format that's fallen out of favor with many advertisers in recent years as they turned to video, often repurposed from their TV ads. Rich-media ads had four times the ROI of the campaign overall.

While weather and location are clearly major factors for ice cream, Mr. Di Como said the study has implications for other brands as well. Hellmann's, for example, has found ads that run from 4 p.m. to 5 p.m. are most effective, because that's when people are deciding what recipes they're going to use that evening.

Mobile may still not be the biggest piece of most brands' budgets, but it is "at the center of our communication plans," Mr. Di Como said. "Our mantra is no mobile, no meeting," so that any media or creative provider has to include it in the conversation.

But is it possible to get too targeted? Procter & Gamble Global Brand Officer Marc Pritchard recently said the company had done just that with Facebook and pulled back to more broad-reach plans on the social network.

"Facebook provides all different ranges of targeting capabilities, from mass reach to hypertargeting, and we use both," Mr. Di Como said. Despite the power of weather and geolocation, along with personalized ads for Magnum, he said, the brand also has found it needs broader-reach mobile advertising to maximize its results.

A recent ARF study found a considerable amount of digital and mobile advertising wasted by overkill -- basically serving the same ad to the same people to the point of diminishing or even negative returns. The relatively low cost and fast wearout makes that risk particularly acute in mobile.

But Mr. Di Como believes the ability to use frequency caps in mobile buys in order to prevent oversaturating people -- a capability that Google said at Advertising Week it is introducing across devices -- actually makes it better than TV.

"You can use frequency caps in the digital environment," he said, "where you can't do that in the traditional TV environment."

Realistically, mobile and digital change so fast that the half-life of any research can be short. Only a few years ago, Unilever was focused on campaigns that were "social by design" to get organic, i.e., unpaid, reach. "We were one of the first ones to find there was a decay on that model," Mr. Di Como said.

That came largely because of changes in Facebook's algorithm for serving brands' posts to followers. It puts a lot more emphasis on paying for mobile rather than maximizing free reach.

At the same time, as Unilever spends more money on mobile, getting measurement right gets more important. So with Facebook in particular, Mr. Di Como said, "We were the first one to push to have third-party verification."

So when Facebook announced recently that its own metrics had overstated average time spent viewing videos in recent years, Unilever wasn't surprised, because it had been getting its own viewership data from Moat, he said.

"We have been working with Moat and Facebook in an open and supportive way," Mr. Di Como said, "to understand all of these viewability standards."

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