By Kathryn Koegel Overview

Prepared for Digi:Day Mobile  Consumer adoption rates surpass Internet: Mobile devices have
achieved greater consumer adoption even than Internet access –
September 17, 2009 which makes them an extraordinary potential marketing medium.
 Smartphones and faster connection speeds are the game changer
for marketers: With the iPhone leading the charge – along with 3G
With data collaboration from: access and unlimited data plans – we’ve reached a turning point for
mobile marketing and a wake-up call to marketers who have not yet
 comScore begun to test the medium.
 Dynamic Logic  Advertiser mix has become more like that of any other media:
 InsightExpress Advertising on mobile phones is being embraced by traditional
brand marketers – not just marketers of cell phone applications like
 The Nielsen Company ringtones and games.
 Quattro Wireless
 Mobile is being used for both awareness and direct response:
Advertisers are using the medium not only for direct response, but
especially in the case of entertainment, personal care products,
technology-related products and automotive, as an awareness
driver and a way to appeal to highly-desirable audiences tough to
reach through other media.
 Mobile has high performance rates relative to other interactive
media: At this stage in the evolution of mobile marketing, its
relative lack of clutter and low cost makes it greatly appealing for
marketers lost within the pods of television, the jumble of search
and web pages and impacted by the declining audiences of print
and radio.

 “Mobility” offers greatest marketing potential: Mobile, the only

medium where the advertising travels and typically stays with the
consumer, offers unique opportunities for geo-targeted and point-
of-sale promotions and marketing. © Kathryn Koegel 2009
1
 Introduction and Premise: waited overnight for the ultimate envy item. How many
One of the ongoing and most clichéd jokes of the products have there been where consumers emerged
interactive marketing space has been that each year post-purchase to be high-fived by the crowd?
presents one killer “app” that will revolutionize all of
marketing. In the Internet, marketers went through the
year of widgets and applets, the year of search, the year
of ad networks, the year of social networking. A
particular type of company is hot with venture capitalists
and when the hype dies down, the interest either goes
away or the type of marketing just becomes another part
of the mix.

It has been proclaimed “the year of mobile” in the US

just about every year since 2000, as venture capitalists
and start-up companies look at adoption rates and usage
trends in other countries. The aim of this paper is not to
declare that mobile has arrived as a marketing vehicle, I got mine. Photo courtesy of CNET
but to separate the hype from the reality in terms of
consumer usage, marketer spend and advertising Even if you were a consumer turned off by the iPhone
hype, it was hard to miss all the publicity around the
developments. There is no company or trade
world's leading celebrity and his particular devotion to
organization backing its publication. Instead, research the smartphone. Obama told the press that the hardest
companies that have been tracking the space since the thing about becoming president was giving up his
early 2000s, both in the US and abroad, have contributed BlackBerry. The company, which realized it has one of
data to it. Their insights are complemented with the biggest unpaid product placement in history, worked
campaign-based data from a leading mobile ad network, with an unnamed government agency to develop special
Quattro Wireless, which serves over four billion ads per encryption so he could keep the phone.
month. The data has been analyzed by an independent
media researcher and consultant who has held
prominent marketing positions in the three leading
media (print, TV and online).

This paper will put in perspective – and in standard

media terminology – an emerging marketing form that
holds dramatic promise for connecting with consumers,
but at the same time continues to present impediments
to effective and efficient usage.

With thumbs flying – First Presidential

So What’s the Big Deal? smartphone. Photo courtesy of AP
In an era of tumbleweeds blowing through suburban
malls, record rates of loan default and unemployment
not seen since the 1930s, cell phones are a shiny, happy, Mobile’s USPs
While consumer exuberance about cellphones has been
anomalous product: the one thing consumers had to
hard to miss, the USPs for marketers have been a little
have at any price. When there was not much to party
about economically, cheerful hoards of Apple-devotées

© Kathryn Koegel 2009

2
 more opaque. Given current market trends and available
data, marketers should pay attention to mobile because: But not all mobile consumers use
Mobile Media
There is near universal POSSIBLE media • 18.6% YOY growth in mobile media usage – just voice users
declines 18%
usage Market Segments
We are now at 85% consumer penetration of phones
[see Figure 1], a number that surpasses Internet use and Mobile
Media,
approaches the reach of television, so it’s no surprise Just Voice,
35.6%
35.0%
marketers need to crack the code of how to get through
to those nearly ubiquitous devices. SMS (and
not mobile
media),
29.5%
comScore MobiLens, US

Phones take on the PC Three month average ending June 09

Figure 2
 Among various demos, mobile phone penetration is equal to
or greater than Internet penetration
 Urban/Ethnic Markets
Mobile Phone Internet
Mobile bridges the ethnic “digital divide”
penetration penetration* between white and non-white usage. Wireless
Gen Y (18-24) 85% 87% devices are heavily used by two of the most
significant broadband holdouts: African
Gen X (25-44) 84% 83%
Americans and Hispanics [see Figure 3]. And
Younger Boomers (45-54) 84% 65% since these groups tend to be eager consumers
Older Boomers (55-64)
 These numbers have not dramatically changed since July 2007
79% 65% of apparel, food and beverages and
InsightExpress 6-09 *Pew 6/07 – has not changed entertainment, wireless devices become that
much more appealing for marketers.
Figure 1
Mobile is more likely to be the Internet access
The challenge is that they are not used as a full-time point for Black and Hispanic audiences
media device – and as comScore data shows, only about
one-third of mobile users are regularly using them as a
media device at all [see Figure 2].

Instead, usage currently can be divided into people who

just see these things as phones, texters and WAP
consumers. Even then, WAP consumers can be broken
down into those with marginal connections (anything
less than 3G) – and fanatics who proudly show off the Pew Internet & American Life July 2009

latest models. It's important to realize that there may Figure 3

not be a steady progression of phone-only consumers to
WAP. Think of how penetration of home broadband  Teens/Gen Y
stalled out at 59% of households (Nielsen, 12/08) and Until the iPhone came along and made a chunk
of GenXers total gadget heads, there was one
DVRs at 33% (Nielsen 09/09). There will remain a group
obvious audience for cell phone marketing: the
of consumers who through income, geography or basic 12 – 24 set [see Figure 4, next page]. For this
lack of desire, will always be holdouts. group, devices are an expression of their
personal style and a rite of passage device.
There are, however, distinct consumer targets that
mobile excels at reaching:

© Kathryn Koegel 2009

3
  Moms
Generation Text Marketers are starting to grasp the power of
Weekly Usage of Mobile Features blogger moms and they should also pay
June 2009
65%
83% attention to mobile moms. A June ’09 study
Texting
33%
52%
from the website BabyCenter showed that 91%
19%
Internet 12%
23%
18-24 yrs
of moms never leave home without their mobile
4%
7%
25-44 yrs device. There is a lot of Facebooking and
10% 45-54 yrs
Video 1%
1% 55-64 yrs photosharing from smartphones going on in a
Applications
14%
14%
playground near you.
5%
4%

Games 8%
20%
21%  Reach of Affluent Audiences
3%
In these austere times, bling is bad, but the
0% 25% 50% 75% 100%
InsightExpress Digital Consumer Portrait, June 09
smartphone is standard operating equipment
Figure 4 for both business executives and affluent
consumers. BlackBerries – and the financial sites
The CW created an entire dramedy driven by accessed through them – are a very precise way
text messaging and alerts. Primo gossip girls to target the $100K plus audience [see Figure 5].
Serena van der Woodsen and Blair Waldorf use
their Verizon LG phones (note product They’re not reading magazines?! Affluent
placement) as weapons in the war for control consumers read on BlackBerries
th
over Upper East Side prep-dom. In the 18
% Income $100,000+
century, epistolary novels were big. Now we 70%
58.0%
have “textolary” TV. 60%
51.4%
50%
40.5% 37.3%
40%
32.0%
30%
20%
10%
0%

BlackBerry BlackBerry Tech BlackBerry Financial news Tech news

Financial News News Owners
Browsers
comScore MobiLens, US
Three month average ending March 09

Figure 5

It's become such a challenge to reach these

OMG R U SREUS????!!! Serena and Blair – Photo
courtesy of The CW.
Teens spend so much time away from other
media at school that mobile has appeal beyond
that of TV and Internet for marketers. They are
not likely to be on smartphonres and the bulk of
their usage is texting, so SMS is crucial for reach
of this group. Parents have stepped up to pay
for limited talk/unlimited text plans, which fuel
this behavior.
time-crunched consumers, that one early-
adopter set of mobile advertising is luxury goods
marketers. comScore and Nielsen are both
seeing luxury auto, watches and jewelry register
in their ad capture data.
Data Rich Environment – Kinda, Sorta,
Maybe…
Just as with search and online display, mobile marketing
has great appeal in terms of the amount of
instantaneous data available. Run an SMS or banner
campaign and you know how many ads were clicked on.
Create a mobile app and determine how many have been
downloaded. Marketers who pixel-tag their sites
appropriately can do conversion tracking based on
banner ad clicks. With the rich media ads for some
smartphones you can capture depth of engagement (in

© Kathryn Koegel 2009

4
 terms of number of pageviews post interaction) and time
spent. Mobile has not, however, reached the point of
being able to fully account for the concept of “uniques,”
which is the online proxy for persons (not all mobile
browsers accept cookies which is how this data is
typically derived). It also does not connect with the sort
of reach and frequency data that is used for television –
indeed, most counts are really looking only at the subset
of consumers on smartphones or reached through text
messaging, which does not equate to the US population.
The view though (an online measure that accounts for
latent impact of an online ad without a click) also
requires cookies and is not yet developed for mobile. For
now, marketers have the arsenal of click rates as a proxy
for effectiveness, post-exposure brand impact studies
like those provided by Dynamic Logic, InsightExpress and
comScore and sales/conversions/forms-filled-in through
the device.
Attentive, Uncluttered Environment: The
Shock of One Unit Per Page!
Any marketer frustrated by the volume of random ads
appearing on an average web page or their pod position
in the 10+ minutes of commercial time per half hour on
cable nets will embrace the fact that rarely more than
one ad appears on a page of content. The kind of
personal connection consumers feel with their phones –
and the fact that phones are a statement of style and
choice – would seem to make mobile a boon to
marketers looking to surf on that cachet.
Handset targeting is a common practice for reaching
distinct audiences (Sidekicks are big with teen girls,
BlackBerry Curve 8330s are the phone of women 35-44,
the iPhone 3GS is the hot ticket to men 25-34 –
site. The advertising-for-content value exchange is
establishing itself.
Geographic & Location-Based Implications
Mobile phones are becoming portable media devices,
which is probably their greatest appeal for marketers.
AOL and Universal McCann released a study in July 2009
that found that the smartphone gets through to
consumers in places some other media finds it tough to
reach: 82% at work, 81% while shopping and 65% while
commuting to their jobs (as reported in Adweek,
7/08/09).
Ads on wireless devices can be effectively geo-targeted
by carrier and DMA. More interestingly, because GPS-
enabled apps are so popular on smartphones, ads can
technically be targeted to the exact location. From a data
perspective, there are permission issues and it is now too
expensive and slow to create the Minority Report
scenario of the ad sending a specific message to you at a
specific retail location at a specific time but that is likely
to change.
The aHa! Moment: Speed and the
iPhenomenon
The latest and biggest selling point for smartphones has
been 3G access [see Figure 6].
The takeoff points? 3G, Unlimited Data,
Smartphones
Growth of Market Enablers
40% 37.3%
35%
28.9%
30%
% Market

25%
20% 17.5%
comScore OEM report 7/09). But this has also been an 15% 12.6% 13.1%
impediment to advertising on the phones: accepted 10% 8.1%
5%
wisdom from the era of SMS-only marketing was that 0%
200806200807200808200809200810200811200812200901200902200903200904200905200906
consumers would find this sort of advertising too
3G Unlimited Data Plan Smartphones
intrusive and privacy invasive – in effect, mobile SPAM. comScore MobiLens, US
Three month average ending June 09
With the growth of the mobile web and ad-sponsored Figure 6
apps, this sensitivity has clearly changed. The most
popular WAP sites (utilities like sports, news and This dramatically improved the user experience for WAP
weather) serve an ad every time a consumer checks the content and is akin to when broadband reached critical

© Kathryn Koegel 2009

5
 mass in the US: if you make it faster, they will come, and
they will consume content. Top devices by Sales vs. Ad requests:
Devices impact content consumption
InsightExpress attitudinal research shows that consumers Top 10 Selling Handsets – Top Devices by
June 2009 Purchasing Rank Ad Requests Q2 2009
are as happy with their smartphone web access as they
Device Device
are with direct web connectivity. The newest Apple RIM BlackBerry Curve 8330 Apple iPhone
Apple iPhone 3G 8GB Apple iTouch
iPhone 3G S model is 54 percent faster than its Samsung Rant SPH-M540 Samsung SCH-R450
predecessor iPhone 3G that came out a year ago LG VX10000 Voyager T-Mobile Sidekick
Motorola W175g RIM BlackBerry Curve 8330
according to tests done by the tech site Anandtech. Motorola i776 Sony PlayStation Portable
Apple iPhone 3G S 16GB HTC G1 Dream
LG Dare VX9700 Samsung SPH-M800 Instinct
RIM BlackBerry Storm 9530 RIM BlackBerry 9530 Storm
This kind of fast access can change behavior even more LG enV2 VX9100 RIM BlackBerry 8130 Pearl
M:Metrics, Inc. 2009 Quattro Wireless Q2 internal data
so than just having a smartphone. As a Forrester survey
Figure 7
of over 61,000 iPhone owners found (reported in
CNNMoney 6/12/09): 78% of working iPhone owners It is important to keep in mind that not all mobile
access the wireless web from their phones (as compared consumers in the US are on smartphones and that the
to that 28% of smartphone users). Eighty percent of iPhone is not the bestselling phone in America. Some in
working iPhone owners text weekly in contrast with 60% the US want not even want to use the phone as a
of working smartphone owners. And those people are personal entertainment device. Or, heretical as this may
walking billboards for the device: more than a third of be to the mobile cognoscenti: shake their phone or make
working iPhone owners go online outside or in another it release gastric noises. July comScore numbers for
public place. This is twice as many as all working mobile smartphones show just what a lead RIM and the
phone owners (17%) and nine percentage points higher BlackBerry still hold [see Figure 8 ].
than all working smartphone owners (26%). iPhone
owners are the proud “look at me” kind of consumers Smartphones: The 13% reality – and
that marketers dream of. Apple does not yet own
 But March to July 2009 Smartphones added 1.28% to their
For marketers, it’s clear that devices impact media share of the total phone install base

consumption. You would assume that the bestselling OS Share of Smart Phones
Smart Symbian Danger Google
phone 3% 3%
smartphones would be driving the majority of ad request 13% Palm
3%
Non- 8%
– but it doesn’t work that way, at least for now. While Smart RIM
Apple
87% 41%
the BlackBerry Curve 8330 is the top phone according to 21%
Microsoft
comScore, Quattro Wireless’ Q2 data shows that it is only 21%
th
the 5 most common device by ad requests (which comScore M:Metrics, US
Three month average ending July 09
equate to volume of media consumed). iPhones and
Figure 8
iTouches crush the Blackberry in request volume, due to
the volume of WAP and app usage on Apple devices [see Some consumers will want to “think different” than the
Figure 7]. iPhone. One great product deserves another and Palm,
BlackBerry and Google’s Android operating system have
the thankless task of catching up – imitation will be the
Even Now It’s Not an All Apple World sincerest form of flattery and consumers will benefit
from lower prices and increased functionality. There will
Apple is so hot right now that wild numbers get thrown be 20 more Android-type phones in the market before
around about the penetration of those iPhones. It’s year’s end. Media is already the beneficiary of all that

© Kathryn Koegel 2009

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 advertising. According to Nielsen’s report on first half
2009 overall ad spending, (a thoroughly dismal story at -
15% overall) the one truly bright spot is multi-function
phone advertising, which was up 107% YOY.
Non-Phone Wi-Fi Enabled Devices:
Gaming for a Connection?
Some of those hot devices accessing the Internet are not
even phones. Apple made a brilliant move by introducing
the iTouch, a device connecting over wi-fi that is
purposely everything an iPhone is except the phone and
thus doesn’t require the two-year AT&T commitment.
They were sold for $99 in Christmas ’08 and have
basically become the portable media device du jour:
apps, gaming, video watching.
The iTouch now takes on the formidable competitors of
the Sony PSP and Nintendo DS whose latest versions all
include wi-fi access, and consumers are now using them
to access the Internet: Quattro Wireless’ Q2 data shows
that the same percent of ad requests come from gaming
devices (including the iTouch) as from iPhones. The 6
th
most popular device by ad requests that shows up in
their system is the Sony PSP portable gaming devices.
Even the bookish Kindle is also a wi-fi enabled device:
Quattro Wireless data shows that the people using
Kindles are a highbrow bunch. They read publications
like the New York Times, The Washington Post and
Huffington Post with their devices – and are much less
likely to be playing casual games or social networking.
With the rapid growth of netbooks (Apple is set to
release one) and the growth of wi-fi – if Obama gets his
wish the US will be one massive hot spot – we are
looking at an entire connected device revolution.
What Kind of Impressions Are We
Talking about? Ads in Perspective
While mobile advertising might at first seem confusing
given all the different cell phones (comScore reports
1,031 –Mobilens, May ’09) and screen sizes, the
marketing on them breaks down quite simply into text
ads delivered via SMS, WAP text links and banners (four
7
standard sizes, no Flash graphics) delivered via mobile
browsers and applications, content integrations and
sponsorships and the as-yet nascent field of rich media
and video. The Mobile Marketing Association made a
very smart move and standardized sizes early so that the
mess of online banners and their literally thousands of
dimensions, never occurred. Which to choose? Each has
benefits and limitations:
SMS: The only way to reach the entire mobile market –
but you have to get them to opt in. SMS is the phone
equivalent of email marketing: as a permission-based
medium, marketers need to pay attention to frequency,
relevance, directness of the message. As text only,
creative is obviously limited, but since consumers are
signing up to receive the messages, it has the benefit of
an established marketer/consumer relationship.
WAP Text Links and Banners: These can easily synch up
with online campaigns. They are simple to create and
traffic through ad servers much like those used for online
display. Most ads are static GIFs, but multi-panel ads
(roughly the equivalent of an animated GIF) are
increasing in the market. They were Quattro Wireless’
fastest growing ad format in Q2 but still accounted for
only 8% of their total impressions during that period.
Rich Media: The iPhone has engendered something of a
creative renaissance in mobile advertising as expandable
ads, and Flash-like ads upon app download have begun
to be developed: companies like Quattro Wireless,
Greystripe, MediaLets and Admob are taking the lead.
Platform A/Third Screen, Pointroll and Eyewonder have
been able to convert ads from rich media online display
to mobile (less creative re-do costs).
Video: Mobile video is primed for takeoff with phones
like the iPhone 3GS. Nielsen’s Q2 ’09 Three Screen
Report finds that consumers of mobile video spent
slightly more time viewing on mobile than consumers of
online video did on the Internet (3 hours:15 vs. 3 hours:
11). The number of mobile viewers in the U.S. has
leaped 70% YOY. Ads in video are pretty much pre-rolls
picked up from online, which are typically repackaged
from TV. The online medium is still debating the length of
a video ad but it only makes sense that a :30 is probably
not suited to the shorter content currently favored by
most mobile video consumers.
Apps: Since the Apple app store launched in summer ’08,
over 1.8 billion apps have been downloaded and apps
© Kathryn Koegel 2009
 have achieved an almost unparalleled coolness factor.
There is no question that doing something innovative in
an app was a great way to get attention for marketers in
’09. As yet, there is no consensus on whether it will be a
cost effective way to continue the conversation.
Charmin’s “Sit or Squat” geo-finder app for public
bathrooms is likely better at generating PR than regular
product usage. Apps pose some distinct challenges for
marketers:
 Separate Development Costs: Now that
manufacturers aside from Apple are in the
game, branded apps now have to be developed
to the separate coding requirements and
approval processes for Palm, BlackBerry and
Android which is a costly and time-intensive
undertaking.
 Market to Make the List: So many apps crowd
the Apple store, that marketers have to devote
funds aside from development costs to make
sure that app sees the light of consumer
phones: There is an entire industry (not unlike
the book marketing world pushing for the New
York Times Bestseller list) growing up around
getting those apps to the top of the category-by-
category “top downloads” lists. Most of the ad
networks also now specializes in “marketing to
make the list” through mobile banner
campaigns.
 Persistence vs. Event Marketing: Apps can
make sense for both goods sold over time and
may also work for those with a distinct shelf life.
There are some great examples of how
packaged goods companies have married
content with product and the location-based
appeal of the phones to create apps that offer a
persistent consumer connection: the Kraft iFood
Assistant app can make grocery lists, find stores
and is used in-store where Kraft wants the
product message to be.
For a fan-intensive movie like Quantum of
Solace, branded apps probably helped build
word of mouth and interest for another Bond.
There’s no telling whether they generated
enough usage and excitement to impact
opening weekend sales. Mini-trailers or
billboards be placed in audience-targeted
mobile video content, or ads on young, male-
skewing WAP sites is an easier to execute plan
that may be more effective.
 Appropriateness of the Content: For ads in
apps, many of which are sold through mobile ad
networks, you have to carefully look at the issue
of transparency. The ad-supported apps that
8
achieve highest reach may not be the best
reflection of the brand. Judd Apatow films may
be perfect in one of the most popular iPhone
downloads – one that turns the phone into a
whoopee cushion – but that app is not for
everyone. For a list of places marketers really
don’t want to be, check out The Huffington
Post’s “10 Most Inappropriate Apps” list. Apps
are just another form of media and the audience
and content of the app should be evaluated just
as any site would.
 Avoid Hype, Plan Strategically: Going with
either a branded app or ads in apps should be a
decision made based on brand strategy: Before
developing an app, marketers have to answer
the all important question “would someone
access this enough to make it worthwhile for
the development and maintenance costs.” Too
often apps are novel one-offs, and not a part of
a sustained consumer conversation.
The biggest challenge to apps will be the mobile browser
war of the future. Remember the PC browser war that
Microsoft eventually won? This time it’s big-bad Apple
vs. up-and-comer Google with their Android browser.
RIM just purchased TorchMobile to improve what they
must admit is a marginal browsing experience – they
have the lead in handsets, if they can just fix the
browser... If you believe that mobile phones are just
another way of accessing the web and shouldn’t require
separate apps for increased functionality, you’re on the
side of the Google camp. Android’s latest versions are
built on HTML 5 which enables location information
through the browser. This will replicate all those cool
geo-enabled apps. Whether apps remain or browsers win
out, consumers will be the victors as the browsing
experience will improve on all smartphones.
Where Are Ads Making an Impression?:
The Dot-Mobs vs. The Fortune 500
In the early days of mobile marketing, impressions were
heavily dominated by cell phone “personalization”:
ringtones and various ways to customize the phone. This
kind of “endemic” advertising should decrease share
over time just as dot-com advertising gradually declined
as a percent of total in the Internet display space. In
2009, marketing on mobile started to look like marketing
in any other medium – and in some cases, categories
© Kathryn Koegel 2009
 hard hit by the recession still had the funds to devote to Advertisers are looking beyond clicks: Early heavy users
this emerging platform. Aside from mobile-related ads, of online display tended to be either dot-coms driving
Broadcast & Cable, Auto, Communications Equip. and traffic or e-commerce. Current heavy users of mobile
such as Entertainment, Electronics and Software are not
Personal Products account for the greatest share of ad
entirely focused on traffic driving. They have already
instances according to comScore in June [see Figure 9]. made the leap beyond click rates [see Figure 11]. This is
likely due to the fact that you can isolate specific demos
comScore: Non mobile categories rank with the phones (urban audiences, teens, affluent
% of Mobile Banner Advertisers by Industry Sector
(teal = mobile sectors / orange bars = non-mobile sectors) audiences).
Food Retail
Leisure Facilities
Internet Software & Services
Hotels, Resorts & Cruise Lines Beyond the Click: Entertainment, Health,
Mobile Music & Video
Application Software % of products advertised Tech use mobile for awareness
Automotive Retail
Wireless Telecommunication Services
Specialized Consumer Services
The Nielsen Company Ad Strategy by Category
Movies & Entertainment
Mobile Personalization
Automobile Manufacturers
Mobile Social Media
Mobile Games and Applications
Mobile Publishing
Broadcasting & Cable TV

0.0% 5.0% 10.0% 15.0% 20.0%

comScore AdMetrix Mobile, June 09

Figure 9

According to Nielsen, 28% of advertising on landing

pages they measured was from Web Media, followed by The Nielsen Company, AdRelevance, June 09

Entertainment at 16%. Consumer Goods accounted for Figure 11

8%, while automotive was 3% [see Figure 10].
Advertisers choose sites for mass reach: In mobile,
A Note on Ad Impression Capture Methodology: traffic is concentrated on certain categories of content:
While the process of capturing ads that have run is news, sports, utilities like weather, and entertainment.
not perfect in any medium, it is especially challenging According to The Nielsen Company’s AdRelevance in June
in mobile due to the number of platforms, browsers
and carriers: proceed with caution with all available
‘09, four of the top 10 advertisers on entertainment sites
numbers; they are helpful for determining competitor are entertainment advertisers, while companies like
usage and placement but in no way reflect the AT & T, Cover Girl, MasterCard and BlackBerry are
breadth of the market. (See Appendix for more looking audience reach, not context.
details.)
Contextual relevance is very important in categories like
Ads on WAP landing pages: Web media, personal finance and real estate: Mobile offers the
perfect combination of appropriate demography, reach
Entertainment, Telco & CPG lead
% Share 3rd Party Est Impressions by Ad Category and context in this case. Consumers – especially affluent
Web Media
ones – are using smartphones to access stock
2%2%
Entertainment information and there are well-developed mobile real
3%3% Telecommunications
3%
Consumer Goods
estate sites and apps that appeal to consumers looking
4% 28%
5%
Retail Goods & Services for property and re-financing.
Financial Services
5% Software
Automotive
There are outlier spend categories like Consumer
8% Travel Goods: While CPG to date has low involvement in online
9%
16% Health
(lack of a connection to sales and reach and frequency
Business to Business
12%
Hardware & Electronics metrics have muddied the value proposition), notable
The Nielsen Company AdRelevance, June 09
Public Services brands like Cover Girl (Proctor & Gamble), Sprite, Crest
Figure 10 and Fanta are embracing mobile [see Figure 12, next
page].
Some trends coming out of both sets of data:

© Kathryn Koegel 2009

9
 Consumer Goods advertisers are 9% of all comScore shows dynamics of medium:
landing page impressions 30% did not advertise in ‘08
June Ad Impressions % of Category Rank Row Labels June 2009 June 2008 Pct Change YOY
1 Google 7035.48 New in 2009
CoverGirl 32% 2 The Walt Disney 1300.62 946.28 37%
3 Microsoft 1182.02 1450.31 -18%
Sprite 21% 4 News Corp. 1011.31 78.46 1189%
5 Thumbplay, Inc. 826.84 1100.20 -25%
Crest

Grey = Fortune 500

8% 6 Viacom 817.16 464.78 76%
7 Quizheros 800.13 New in 2009
Fanta 5% 8 ClubM8 767.04 24.73 3001%
9 Tata Motors (Jaguar) 750.19 New in 2009
Gillette 3% 50% are personal 10 Time Warner 702.61 1582.60 -56%
11 Cisco Systems 672.88 188.30 257%
General Mills, Inc. 3% care products 12 CBS 651.57 130.00 401%
13 PredictoMobile, LLC 623.77 New in 2009
ConAgra Foods, Inc. 2%
14 Acotel 615.68 303.79 103%
15 General Electric 575.74 17.63 3165%
Degree 2%
16 Research In Motion 564.44 New in 2009
17 SAP AG 438.55 New in 2009
Suave 2%
18 CSW 438.10 69.06 534%
19 Toyota 434.16 559.16 -22%
Post 1%
20 eBay 392.15 22.27 1661%
The Nielsen Company, AdRelevance, June 09 comScore AdMetrix Mobile, June 09

Figure 12 Figure 14

The upscale approach is clear in Auto: Jaguar, Lexus,

Toyota Prius and Infiniti are on the top 10 auto
impressions list [see Figure 13]. Nielsen’s data on WAP landing page
advertisers: Mostly Fortune 500
Share of Estimated
Top Homepage Advertisers Impressions June 09
Landing page Auto impressions Weather.com (NBCUNI)
Sprint Corporation
15.4%
5.7%
Psychic Center 4.0%
June Ad Impressions % of Category Deutsche Telekom AG 3.8%

Grey = Fortune 500

Google, Inc. 3.6%
Acura… 33%
Microsoft Corporation 3.5%
Toyota 27% Electronic Arts, Inc. 3.2%
TNT (Time Warner) 3.1%
Lexus 10%
CoverGirl (P&G) 2.8%
Buick 7% Align Technology, Inc. 2.0%
Sprite 1.8%
Nissan 7% Many models are PredictoMobile.com 1.8%
DreamWorks SKG 1.7%
Jaguar 2% luxury Acura Automobiles 1.4%
Hyundai Motor … 2% Viacom Inc 1.3%
Apple Computer, Inc. 1.2%
Ford 2%
Toyota 1.1%
Infiniti 2% The Nielsen Company AdRelevance, June 09

Chevrolet 2%
Figure 15
The Nielsen Company, AdRelevance, June 09

Figure 13

Year-over-year changes attest to the dynamic nature of

the medium: If you look at the leading advertisers from
a year ago vs. today using comScore data, you can see
just how dynamic the medium is: the top advertiser,
Google, wasn’t even on the list in 2008 [see Figure 14].
Some did cut back on what probably came out of
discretionary budgets and some are on an upward
growth trend. But it’s clear that when a list has
advertisers like Walt Disney, Cisco and Toyota in testing
mode, they will use their learnings to increase spend in
the future. Nielsen’s list of top landing page advertisers
also has a decidedly Fortune 500 skew [see Figure 15].
The Inventory Glut: A Little Less
Gluttonous?
With consumption rising, there's a lot of inventory to go
around in an emerging medium. comScore data shows
strong variance in percent of house vs. paid ads by
category: Downloads, Real Estate and Services have the
highest percentages of paid inventory [see Figure 16,
next page].
Relative Cost:
As might be expected, ad categories that desire targeted
audiences or very specific context tend to be paying
highest CPMs. Quattro’s Q2 data shows that Finance,

© Kathryn Koegel 2009

10
 lesson to be learned for online display advertising. But, if
House Ads: Unsold inventory similar to
we are to take clicks as a proxy for ad effectiveness, it’s
early days of web
Ad Monetization by Genre, April US more useful to look at relative numbers by ad category;
Paid Ads House Ads after all, some categories are likely to be focusing on
awareness more so than a direct response. So for the Q2
Quattro Wireless data, if we take 100 as a baseline, the
relative performance by category is shown in [Figure 18].

Consumer Goods generates highest response

followed by Autos, Finance & Entertainment
Index of CTR (US)
comScore AdMetrix Mobile, April 09 250
214 CPGs are often using
189
Figure 16 200
170 164 mobile for promos with
157 155
150
call to action
126 124
114 107
98
Automotive, Electronics ad costs are about eight times or 100
97 95
79 72 61 56
44
more that of the average CPM. The direct business -- all 50

those mobile-related, dating, education and gaming 0

advertisers – tend to buy on a CPC basis and pay below

the average [see Figure 17].
Quattro Wireless Q2 internal data, US

Highest CPMs paid by Finance, Autos and Figure 18

Electronics; Mobile advertisers buy on CPC
2000
Consumer Goods (which in this case includes health and
Index of eCPM and eCPC By Industry (US)
1600 Finance demands
beauty products) have highest relative direct response
highest levels of rates. If you look at some of the creative out there you
1200
audience and content
targeting – thus higher
see that these companies are marketing to highly-
800
eCPM
CPMs responsive young audiences through mobile. Some use
400 eCPC click-to-coupon offers or in the case of beauty products,
0 click to purchase. Other high performing categories tend
to (very subjectively of course) have some of the most
dazzling mobile creative: entertainment and automotive.
Quattro Wireless Q2 internal data, US

Click rates also vary dramatically by device as Quattro

Figure 17
Wireless Q2 data shows: clearly, devices impact behavior
[see Figure 19, next page].
Response: The Realities Just as people on iPhones are more likely to consume
There are claims in the market of response rates more
more content, at this stage of the game, they are also
than 200 times that of online display (20%)?! First off,
more likely to click. Their behavior is similar to that of
let’s establish that an overall click rate for an entire
consumers on non-phone gaming devices, while
medium is not a very helpful metric to a marketer. It
consumers with BlackBerries and other types of
doesn’t take into account the quality and intent of the
smartphones are more similar in likeliness to respond.
creative or the variable of placement.

There are also two likely factors coming into play:

novelty, and the relative scarcity of mobile ads in the
market and on the page of content – this last fact is a

© Kathryn Koegel 2009

11
 positive brand impact – even if you factor out the novelty
iPhones generate highest response followed by
gaming devices of mobile advertising. [see Figures 21 and 22]

Index of CTR by Device

Mobile scores for branding metrics: Is
160
The Apple OS
lack of clutter a benefit?
140 135
encourages consumer
120 105 16.5
interaction
100
79
80 66 62 10.7 10.5
60 9.1 8.6
40
20 4.9
2.7 2.2 2.7
- 2.0
iPhone Gaming Palm Android Blackberry
Quattro Wireless Q2 internal data, Global Unaided Aided Ad Awareness Brand Purchase Intent
Awareness Awareness Favorability
Figure 19
Mobile Norms Online Norms
InsightExpress: InsightNorms Delta calculations based on overall exposed percentages (minus control)
Respondents: Mobile N = 47,658 Online N = 513,973
The type of ads also has an impact. Animated ads
Figure 21
outperform static banners and text [see Figure 20].
Dynamic Logic’s “spidey graph” also makes the point that
Animated ads offer 63 point response lift online video and mobile show similar response
over banners footprints. Both companies do not yet have enough data
Index of CTR
180 171 to break out impact by smartphone type.
160 Expanding ads =
140 engagement not clicks
120 108
98
Mobile Ad Impact compared to early
100

80 72
Online Ad & Aided
Broadband
Brand Video norms
Awareness Early Online Norms (2000-2002)
60 25 Early Video Norms (2002-2004)
40 20 Mobile
20 15

0 10
Purchase Intent Ad Awareness
5
Animated Banner Expanding Text
0

Quattro Wireless Q2 internal data, Global

Figure 20
Brand Favorablity Message Association
Expandable ads – which are just making the scene on
iPhones and Android phones – are more an engagement Percent of People Impacted

vehicle and should be measured on depth of pageviews Dynamic Logic’s MarketNorms; Online (2000-2002). N=616 campaigns; Online Video MarketNorms (2002-2004), N=34 campaigns;
AdIndex for Mobile Norms through Q2/2009, N=48 campaigns, n=46,691 respondents
Delta (Δ)=Exposed-Control

rather than clicks. Figure 22

Branding in Small Spaces Where Does Mobile Fit in the Marketing

Because mobile is such a personal medium – and perhaps
Mix?
because the ad units are scarcer than in other media –
Just as with online, there is no simple answer as to what
various brand metrics, such as ad awareness and
mobile contributes to the media mix. It can achieve
message association are high compared to online.
reach, it can provide high audience comps, it does have
Interestingly, the rates are more similar to those of
response mechanisms built in (and not just clicks, but
online video than they are of the early days of online ads.
voice response capabilities) but like online, is saddled
Both InsightExpress and Dynamic Logic, which have
with creative challenges and its location-based targeting
developed control vs. exposed methodologies for serving
is not fully developed. Mobile should not make the
simple surveys to wireless users, are showing very

© Kathryn Koegel 2009

12
 mistake of attempting to be something it is not or spend
too much time comparing itself to television in terms of
reach or online in terms of interactivity and information
intensity. Mobile is just another way of accessing
interactive media but by its always-with-you nature, has
its own uniqueness. Mobile can:
 Add efficient reach to an online display campaign
 Become an activation medium for outdoor, print and
television campaigns
 Replace/complement print and outdoor for reaching
key demos including urban and affluent audiences
 Replace/complement newspapers, email and online
for couponing and promotions
Commerce or Just Browsing: The Killer
Apps of Mobile?
Back in 1999, the question was, would consumers,
especially Boomers and above get over fears of security
and start buying via the web. 2001 actually was the year
of e-commerce, so they clearly did. As of now, a small
percentage of consumers have conducted some form of
mobile commerce (6.7% of subscribers according to
Nielsen). Just as in the early days of e-commerce, the
same security concerns exist for mobile. Billing
Revolution, a mobile wallet company, recently conducted
a study through Harris Interactive (6/09) about consumer
attitudes to m-commerce: not surprisingly, once again it
is an age-based issue. Fifty-nine percent of those 18-34
said they thought m-commerce somewhat safe, while
only 34% of those 55+ said the same.
Smartphones impact not only usage of media, but
willingness to even consider making a purchase over the
phone. iPhone consumers are probably most primed for
the mobile buy as they make transactions regularly with
the purchase of apps – but then their personal info is
already stored on the Apple secure site. According to
InsightExpress (Digital Consumer Portrait, 6/09) 45% of
smartphone users said they would like to purchase in one
click; only 18% of feature phone users felt the same.
What kind of products? The Billing Revolution survey
showed that impulse and convenience purchases are
13
most likely to be made. Pizza topped all other product
types at 59%. Papa John's has a successful m-commerce
capability; what dorm party would be complete without
a pizza ordered over the mobile phone? The other
choices mostly relate to activities that phone mobility
supports: movies (58%), hotel rooms (43%), music (41%),
and coffee (25%). Perhaps the pay model will work for
some content on mobile: 25% said they would be willing
to pay for mobile video or TV.
As speeds increase and the wireless device becomes just
another way to access the Internet, it only makes sense
that some types of m-commerce will take off. There’s
also nothing like necessity to encourage consumers to do
something they are at first uncomfortable with: those
frustrated by long movie lines will buy the ticket from
their phone and jump the queue.
Comparison shopping would also seem to be a very
strong possibility for growth, especially in price sensitive
fields like consumer electronics. Consumers like to touch
the merchandize in stores, but they also want the best
price. InsightExpress surveyed consumers in December of
’08 and found that 30% of smartphone owners had done
just that. What’s to stop them from checking out the flat
panel at one merchant and then using their smartphonre
to see what the guy down the block is offering it for. All
those retailers who promise they’ll match any price?
They should get ready and optimize sites for WAP usage.
Couponing: The Stealth App?
Two areas of marketing now seem hopelessly outdated
and rife for a revolution: FSIs and direct mail. The former
because its primary mode of distribution, newspapers, is
going out of business, the latter because it’s expensive
and relatively inefficient compared to email marketing.
New generations of consumers have been primed for
mobile couponing by the experience of email and online
couponing. In a survey conducted through the Google
Affiliate Network in 2008 (Online Promotions and their
Impact on the Purchase Process), nearly 90% of people
who shopped online went online in search of coupons.
Grocery coupons are the big Kahuna of promotions and
with most authentication issues resolved, consumers are
© Kathryn Koegel 2009
 now being encouraged to print from their computers and have such a loyal fan base that they probably do
redeem. Why not transmit that info to phones and save want to know where every last outlet is.
the printing and processing step? Companies like CVS 3. Keep it in Perspective: Don’t be so bowled over by
and Target now do mobile couponing and transmit bar the iPhone that you overlook other forms of device
codes to the phone that then have to be scanned. There usage:
have been some challenges with readability of the bar  SMS is a cost effective way to reach non-
codes and it can slow down the checkout process. smartphone users and really easy to execute: it
is platform agnostic and 1 in 4 texters get
One company has taken this a step further. CellFire mobile messages (comScore 6/09).
transfers couponing data consumers have opted into to
 BlackBerry is the #1 phone in the US, and
their loyalty cards. They have so far signed up Krogers, BlackBerries currently have greater reach of
Safeway, Colgate Palmolive, General Mills, Kimberly- women, affluents and business users
Clark, Unilever, McDonalds, Subway and Sears. For the
 Gaming devices – especially the iTouch and Sony
grocery program, consumers register on a PC or phone at PSP – are another way to reach a young, very
either cellfire.com or the retailers’ web site. They select interactive audience not likely to be on iPhones.
coupons which are immediately loaded to their unique ID
4. Smartphones Demand Smart Creative: With all of
(from the loyalty card). When they checkout in store, the the excitement about device targeting and types of
register applies them to the appropriate items and shows marketing in mobile, do not overlook creative best
on the receipt how much they saved. practices. In mobile, simple and straightforward with
the brand in every panel is the best policy. You can
Mobile couponing activity is now miniscule – of the 6.7% also start experimenting with more graphic ads for
of mobile subs that have conducted some kind of some smartphones – many of which may be
commerce, only 9.3% of them used mobile repurposed conceptually from rich media online.
coupons/vouchers or roughly 1.3M, based on Nielsen’s Dynamic Logic data shows great variability in impact
by the creative [see Figure 23].
Q2 data. If the retailers involved in programs like
CellFire’s drive adoption in store, the cost of entry will be
reduced and the programs could take off.
Creative matters: Deltas show room
for improvement in mobile
Best Norm Worst
45.8
Takeaways for Advertisers and
Marketers 22.2
19.4
1. Start Now: The explosion of the iPhone, the way it 11.2 12.1
8.4 8.7
has shown to change consumer behavior and the 5.6 3.3 6.9
4.2 4.2 2.2 5.9 3.6
advent of faster connection speeds are the wake up
call to start now and develop the knowledge base to Aided Brand Ad Message Brand Purchase
enable successful campaigns now and in the future. Awareness Awareness Association Favorablity Intent
Percent of People Impacted
AdIndex for Mobile Norms through Q2/2009,
2. Remember that Mobile is Not Just About Overall N=48 campaigns
Delta (Δ)=Exposed-Control
Advertising: It’s an engagement builder and
Figure 23
sometimes just a utility. For banks, having a WAP
optimized site that enables your customers to do There is clear room for improvement. Both
various banking functionality via their phones is a comScore and Nielsen now have libraries of running
given. For the right products, a branded app or game creative as do many of the networks. DM2’s Digi:Day
that ties into a specific offline promotion can be a held its first Mobi Awards and all of the nominees
terrific way to stay in touch with consumers. (www.dm2pro.com) are worth studying for their
Retailers can benefit from the geo-location innovative approaches. Just like online, it can be
functionality of apps on smartphones as they make it
easy for customers to find them. In ‘N Out Burgers
© Kathryn Koegel 2009
14
 tough to catch the great campaigns; learn from what
others are doing.
Start with the Basics: Goals, and the overall
strategic cross media plan and how mobile fits into it
should be assessed before entering into any mobile
marketing campaign.
 Banner campaigns are typically simple to
execute and optimize and can reach both WAP
sites and apps.
 Weigh carefully a branded app vs. ads in app
strategy:
 Is it better to create a new app or buy ads
within an existing audience and content-
appropriate app?
 Are there apps that so reflect the brand that
a solo sponsorship will be worth the cost?
 If you create a branded app, will it add value
to the consumer and achieve continuous
usage to benefit the brand over time?
 Do you have the resources and time to
develop the app for more than one
platform?
5. Don’t Forget Your Site: Don’t be so excited by apps
that you neglect your WAP-enabled site:
 Browsers will get better and if Google or
Microsoft have their way, more universal so that
content and ads on the browser improve on all
cellphones.
 Comparison shopping is becoming a reality and
if your commerce site is not WAP optimized, you
could be losing out to your competitors.
Consumers expect to be able to click through to
a great experience on all phones, and the right
development partner can make that happen.
6. It’s Not Mobile Advertising, It’s Advertising: Mobile
is personal. Dynamic. Geographic. Can do some
really cool stuff. In the heat of the consumer
moment, don’t overlook the basic precautions of any
good advertising campaign. Start with a strategy that
complements other media initiatives. (A strategy is
not: we need a sexy app!) Be sure to protect and
enhance brand value for the long term. Be attentive
to the needs of the consumer and their sensitivities
on this very personal device. Go for the big V: add
value whenever possible.
15
End Notes
Contributors:
The following individuals contributed greatly to this report with
ideas, analysis and data:
 Evan Neufeld, VP, Senior Analyst, Mobile, comScore
 Ali Rana, VP Digital Strategy, Dynamic Logic
 Joy Liuzzo, Director of Marketing and Mobile
Research, InsightExpress
 Julia Resnick, VP Mobile Media, The Nielsen Company
 Lynn Tornabene, CMO, Quattro Wireless
Additional Thanks:
 Ron Pitluk, Director Data Operations, Quattro
Wireless – all Quattro data
 Alex Maiorescu, Principal, Primary Impact – additional
data analytics
Resources:
The following reports are essential reading for those seeking to
understand the emerging marketing dynamics of mobile –
especially the “how to” piece:
 IAB Mobile Buyers Guide, July 2009
 Mobile Best Practices in Brand Development,
InsightExpress 2009
 Mobile Marketing Association site: for creative best
practices and standards
 Realizing Potential, Overcoming Barriers to the US
Mobile Advertising Marketplace, Nielsen, May 2009
 Wireless Internet Use, Pew, July 2009
Appendix on Mobile Ad Capture
Nielsen monitors ad activity on the landing pages of the most trafficked
WAP sites, as identified through its Mobile Internet research (currently
161 sites are tracked). Each site is probed ~150 times per day. The
platform simulates eight of the most popular feature phones and
smartphones in the market. With each probe, the technology extracts
advertisements and session information and subsequently all
advertisements are classified. Nielsen them employs a model that
reflects ad appearance frequency to derive estimated impressions.
Depth and breadth of coverage is expected to expand in the coming
months. Nielsen does not presently capture data on ads in apps
through Mobile AdRelevance. Due to a change in methodology in May,
there is no YOY trending. Nielsen also has a wireless bill panel of 55,000
lines that monitors reach of SMS- based campaigns.
comScore uses a spider that conducts dedicated “scrapes” of top
mobile sites every 5 hrs, 7 days a week. As part of this process they also
mimic specific device types to ensure that they are capturing
specialized ads which could appear on any WAP page of a site. The data
they capture is reflected in ad instances, which are not impressions but
the number of ads that appeared and they happened to spot. They
have YOY trending but do not yet have a methodology for capturing
ads in apps.
© Kathryn Koegel 2009
 About the Author
Kathryn Koegel is a principal at Primary Impact, a company that does media research consulting and data insight
development for agencies and marketers. She has created marketing strategies for companies like DoubleClick,
Gemstar TV Guide (Interactive Program Guides and the cable network), US News & World Report, The Online
Publishers Association and one of the first Internet ad networks, Phase2Media. At DoubleClick, she was in charge of
research and industry development from 2002 to 2005. Her research work has been accepted and published by the
ARF and ESOMAR. She dropped her first smartphone, a red BlackBerry Curve, into a bucolic rushing stream which has since become
known as Blackberry Falls. The photo chip survived, the device was not as lucky.

Contact her at: kathryn@primaryimpact.com.

This paper is part of a series written for agency and marketing executives that present straightforward, media and research vendor-
agnostic status reports on emerging media types. Future whitepapers include: State of Digital Display II (to be published at DPAC IV,
10/26/09), State of Social Media Marketing and State of Online Video. For updates, see www.primaryimpact.com.

Last known photo taken from red BlackBerry 8830.

© Kathryn Koegel 2009

16