Mobile Phone Application Advertising


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Contents -Overview
-Audience and Usage
-Applications
-iAd
-iPad
-Limitations
-Cost
-The Future
-References

Overview
In today's face-paced and ever-changing society, advertisers are having to look towards alternative means of getting their messages across and generating new ways to appeal to the likings of the consumers. At the end of the year 2007, there were a reported 255.4 million mobile phone subscribers in the United States alone, nearly 85% of the country. With the growing rate of mobile phone users, the opportunity to advertise increases as well; third party companies have been and are continuing to develop applications that generate revenue through sales and, of course, advertising. Mobile devices, unlike any medium we have experienced before, offer instant access whether it be entertainment, communication or information.

Audience and Usage
Mobile devices are used in various ways by several audiences ranging from young children all the way through older adults. Dialing and receiving calls is no longer the only task one can do on a phone; text messaging, streaming videos, downloading music, checking the weather, surfing the Internet, and various other services are available at one's fingertips. With a wide range of consumers with several different likings, the potential to target specific individuals according to their personal tastes is a big advantage for mobile advertising. Three categories help us in determining what type of "mobile" person we may be:
-Mobile Traditionalist: Makes up a majority of the population which about 60% of the population is considered. These users are familiar with the basics of their device and usually only use the calling anNokia_6131_4.jpgd text messaging features. This group is comprised of those 35 years of age and older and is even more common in the 65 years and older range. While advertising is limited on these devices, it still occurs in the forms of banners and pop-up ads. The interactive perspective is not present like in the newer models but is still important in selling ad-space.
-Mobile Wannabe: Approximately 25% of American mobile users are in this category. They use similar features as smartphones but do not necessarily run as many applications as such. Downloading music, streaming videos, calling, text messaging, and Internet browsing are common Picture_1.pngamong these devices. Advertisers use similar content as those on the smartphone due to the fact that mobile phone companies are creating new phones that incorporate this technology. Less than half of these users are under the age of 35 and are common among middle school and high school students.
-Mobile Pioneer: The third and final category of mobile user is the "Pioneer". These individuals are seeking the brink of technology and want to be as far ahead of the curve as possible. While only 15% of users are found to be in this category, they make up a majority of the advertising audience with the use of smartphones such as iPhones and Blackberry's. Single males under the age of 35 are likely to be found using Internet sites, videos, games and several other applications that tend to be reserved for smartphones only.Various forms of advertising are available on all three types of mobile phones, although the majority of research and development is being put into the smallest, yet most effective group, the "Mobile Pioneers".

Applicationsdroid-vs-iphone1.png
Apple's iTunes has revolutionized the way users access third-party applications and quickly and easily add or remove them from their mobile device. It is a software-based digital media store that allows consumers to access it's content from anywhere in the world, along with being able to share personal media content. With over 200,000 items to choose from; videos, songs, movies and photos may be shared from one's computer to their personal device. iTunes recently recorded it's 10 billionth download and did so in under seven years of operation, this tell us the reach of mobile advertising has the opportunity to be seen in various formats with a wide range of consumers.
Advergames are also becoming increasingly popular among advertisers and consumers. The short and simple games that we generally see as pop-ups on our compPicture_2.pnguters are now being translated for mobile phone use. However, there are more technologies available in phones compared to laptops or desktop computers. An accelerometer is a technology found in the iPhone, Motorola Droid and Palm Pre that detects whether one is holding their phone portrait or landscape; as the user rotates the phone, the image on the screen will do so as well. Not only has is made for a more convenient experience when viewing web pages but it also allows for advertisers to use this to their discretion.
The Dockers ad (shown below) is one example of how advertising can become more interactive than before. The user simply shakes the phone to begin the ad and does so continuously until the ad is over. This is considered to be a fun and simple way to attract users to the sponsoring products.omd.jpg
Mobile advertisers have the ability to record and track what applications one downloads and use; this data aids in the decisions of where to place ads. For example, one who tends to play a lot of sports games will get banner ads advertising sports apparel, teams and tickets; one who has applications related to shopping and clothing is more likely to receive banner ads that advertise department stores, designers and apparel. With media turning to a predominately digital basis, targeting audiences has become more specific and individually oriented.
iAd
With over 185,000 mobile applications available in iTunes, many developers make their apps available for free while others charge anywhere from $0.99 cents through $2.99, a fairly cheap price. These prices are extremely helpful for the users, however companies are lacking revenue through advertising by making their apps inexpensive. Apple's CEO and creator Steve Jobs, claims iAd will be built in to the newest iPhone 4.0 software update as Apple has nearly 100 million devices currently in service. With thorough research, Apple found that each iPhone owner uses mobile applications around 30 minutes each day; iAd would place approximately 10 ads (give or take) per phone, per day (similar to that of television advertising) which would translate into around one billion ad opportunities per day in the iPhone world.
Video: Apple's founder and CEO, Steve Jobs, explains the newest form of mobile advertising, iAd.

Television advertising is still the primary medium for capturing the emotional appeals of its audience while Internet advertising uses the interactivity approach to draw attention. Apple is determined to create a new form of advertising that uses both emotional and interactivity in order to sell to an emerging audience rather than one form or the other. Currently, on all mobile devices, when a user selects an ad, they are removed from the current application and sent to a browser, iAd will enable the application to remain open and simply return to the task at hand when the ad is over. Before, users would shy away from these advertisements because of the inconvenience of having to find your way back to where you left off, however because iAd is built into the operating system of the phone, Apple has found a way to combine interactive and video content on top of the application in use, giving the user accessibility to a series of videos, games, wallpapers and the ability to purchase other applica-and-now-its-a-full-page-ad-there-can-be-interactive-features-video-ways-to-buy-stuff-launch-the-companys-web-site-etc.jpgtions directly from the advertisement. The use of similar tagging functions that are in current use, in order to give the user the most relevant ads, will also be present. As for developers, adding iAd to their current applications can be done in just a few hours and does not affect quality or performance. Apple also plans to sell and host the advertisements while giving the developers an industry standard 60% of the revenue.

iPad
Apple has recently unveiled a revolutionary device known as the iPad. The iPad offers its users the benefits of physically holding a device, similar in size to that of a magazine while harnessing the computing technology of a laptop computer. Magazines, such as Wired, are using the iPad to their advantage in order to attract more readers and create more revenue through the use of interactive advertising. Similar to the iPhone, the iPad offers the chance for a completely interactive experience but does so on a larger scale. Increased screen size and operating power makes it ideal for magazine advertisers. Unlike print, which relies on text and still images, iPad advertising can use video, audio and other forms of animation in attracting audiences; along with the ability to broadcast more information than traditional print ads do.
Video: Demonstration of Wired Magazine on Apple's iPad.

Limitations
Mobile advertising has opportunities to advance user-product awareness, however many critiques claim that click-through-rates (CTR) on mobile devices are not as
frequent as those on web pages. A study done by Chitika, which generated its data through 92 million page impressions, found that iPhone users have an average CTR of just 0.3%, less than half of that of traditional methods. While CTR's are usually low, Windows CE and Palm devices leading the way, developers rely heavily on advertising, but users are simply not using them as often as advertisers would like. We generally see ad-free applications, however they come with a cost to the consumer, which is also the primary means of revenue for the developers. If buyers would like to experience cost-free applications, advertisements become the ultimate means for developers to make money from their work, but consumers are not using them as often as desired.

Cost
Compared to television, radio and billboard advertising, the cost of advertising via text messaging is 50%-60% higher; this is where mobile application advertising becomes crucial. Unlike traditional mediums, there are three distinct ways to purchasing ad space:
-Cost Per Thousand Impressions (CPM): The count of a delivered basic advertising unit from an ad distribution point per thousand.
-Cost Per Click (CPC): Paying for ads whenever a user interacts with an on-screen advertisement.
-Cost Per Action(CPA): Process of paying for ads whenever a user takes an action on a website, for example, signing up for a sites newsletter or message board.
CPC and CPM are the most effective ways of calculating ad sales as CPA does not occur as often. In a report from October 2007, the average cost of a US mobile marketing campaign was around $5,000 in 2005, $30,000 in 2006 and $100,000 in 2007, an extremely large increase in just three years. With banner ads, the average CPM is an estimated $10-$50 while most campaigns run from $20-$35. Along with Apple's plan to generate revenue through the use of iAd, developers will be faced with the choice of whether to charge a fee for ad-free applications or to allow for ads to appear among their free apps. Not only will Apple buy, sell and maintain the ads, they also plan on keeping only 40% of revenues and giving 60% back to the businesses.The Wireless Advertising Association (WAA) is also researching ways to help cut costs of mobile marketing. Currently, companies such as AdMob, Eyeblaster, Jumptap, Microsoft Advertising, Millennial Media and Ringleader Digital are the top players in the mobile marketing business.

The Future
For Mobile Applications, the future of advertising looks promising with the growing popularity of smartphones that use networking technologies. We now have access to our favorite entertainment, productivity and sports media on the go, when before we were limited to our desktop computers and televisions. The conglomeration between the world wide web and mobile devices along with faster cellular reception have made for an incredible experience in the palm of our hands, this gives advertisers the opportunity to create digital ads that are fully interactive and have the users likes in mind. Immediacy is important in today's society, which goes to show that advertisers have the chance to reach consumers anytime and anywhere; different from the past as televisions, radio and print, for the most part, were concrete and only viewed when the user chose to. Companies such as Apple and Android have revolutionized the mobile media experience and will continue to do so in years to come along with the chance for new competitors to enter the market..

References
Morrissey, Brian. (2010 April 8). Apple to Roll Out Ad Net. Retrieved April 10, 2010 from AdWeeks website. http://www.adweek.com/aw/content_display/news/digital/e3i3ddc3639f0395ca89846a5724288a9f7

Interactive Advertising Bureau: Platform Status Report: A Mobile Advertising Overview. (2008 July). Retrieved from Interactive Advertising Bureaus website. http://www.iab.net/iab_products_and_industry_services/508676/1488/mobileplatform

AdMob Mobile Metrics Report. (2009 November). Retrieved from Mobile Marketing Associations website. http://mmaglobal.com/research/admob-mobile-metrics-report-november-2009

Mobile Advertising Guidelines. (2009 September). Retrieved from Mobile Marketing Associations website.
http://www.mmaglobal.com/mobileadvertising.pdf

Videos:
KingKabooka. (2010 April 10). Apple iPhone OS 4.0: iAd Part 2. Retrieved from http://www.youtube.com/watch?v=32wOPLCtj9E

macipadforum. (2010 February 16). See Wired Magazine on iPad. Retrieved from http://www.youtube.com/watch?v=wwFbwHaP5tE&feature