Since Google's announcement of enhanced campaigns, all eyes have been on mobile. Advertisers who have felt the pain of lower ROI are left wondering, "Are enhanced campaigns going to help me win in Google mobile – or are they designed to help Google win in mobile?"
Let's start by acknowledging that yes, mobile is growing like crazy. People are using these devices at an accelerating pace, and eMarketer has forecasted mobile advertising to be almost an $11 billion business by 2016, up 315 percent from 2012.
Interestingly, a recent study by IAB reports that "mobile" doesn't mean "remote," as mobile activity happens most often in the home. This finding contrasts with the widely held assumption that mobile ads are most viewed by consumers "on the go."
But the IAB findings explain that the period of highest usage of mobile devices occurs during leisure activities at night, rather than during the "on the go" errand-running times of the day. That said, time of day and type of activity have implications for mobile performance.
Image Credit: Rimm-Kaufman Group
An internal adMarketplace study recently showed that tablets converted 93 percent as efficiently as desktops while smartphones were only 49 percent as efficient. Other reports support this finding, including this one from independent research publication, Marketing Charts, which highlights low conversion rates on phones when compared to tablets and desktops during the holiday shopping season.
Reported revenues per click for each device reflect the disparity in performance on phones as well. The chart below shows us how far behind phone click volume is compared to tablets and desktops.
Image credit: Rimm-Kaufman Group
The good news is search ad providers are acting to give advertisers the tools to remain profitable despite this disparity in performance. Google's enhanced campaigns lets advertisers adjust phone bids as a percentage of their desktop/tablet bids in a single campaign; Bing Ads allows for separate targeting by device type at the campaign and ad group level.
Having this granular control over a rapidly expanding market is great, but it doesn't change the fact that you need to hold mobile to a different standard. As marketers, you're under pressure to guide mobile consumers down the conversion funnel and generate an immediate profit on your investment.
Consumers, however, don't feel the same pressure to convert immediately. Aside from creating mobile-friendly websites and targeting ads with mobile-friendly assets, you can't force mobile users to behave the same way as if they were at their desktop during the day.
So how do you win with mobile? Instead of holding mobile performance to the same standards as desktop and tablets, you should adopt an altered and more realistic set of KPIs. Here are three strategies to succeed in today's mobile marketplace:
1. Relax Your ROI Goals
If your target is 5:1 for desktop and performance to date on mobile is 2:1, consider setting a target ROI of 3:1 for mobile instead.
With lower ROI expectations, you can continue to engage your target audience on this device and be more likely to achieve your goals given what you know about behavior by device type.
2. Analyze Engagement Metrics (e.g., Time on Site, Pageviews, Unique Visitors)
Invest more time and resources into mobile experience as you do with desktop. Find where users are looking, and more importantly where they aren't looking, to optimize their mobile experience.
While tracking conversions across devices can prove difficult, mobile advertising does get users deeper into the sales funnel. Remember, many of today's consumers conduct product research with their phone, and finalize purchases with their tablets or desktops at a later time.
So consider this a "higher funnel" activity, and consider allocating branding budgets – not strictly direct response budgets – to mobile devices.
3. Think About How You Use Your Own Devices
If you want to show a friend a funny video on YouTube, are you more likely to gather around your laptop or pass around your tablet? Do you tend to make more purchases on your mobile devices during your commute or when you get home to your laptop? My experience on both questions is the latter.
Once marketers and advertisers acknowledge that consumer behavior conforms to device capabilities, they can begin to adapt their expectations and hold mobile to a different standard.
As the current research shows, phones simply aren't being used as often for purchases. Mobile is a more effective tool when used for brand awareness and research than direct response. Adapting your marketing strategies accordingly can reduce your likelihood of panicking when you compare mobile to desktop performance and missing out on this crucial opportunity to promote your brand.
Broadening your expectations will allow you to stay in communication with your customers throughout the course of the day and increase the likelihood that they'll convert.
Until the day when mobile becomes the ultimate purchasing agent, advertisers should take mobile for what it is – an excellent tool for brands to strengthen relationships with consumers.
This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) will bring together the industry's leading online marketing practitioners to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, the comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!