Why Effective Mobile Marketing Requires An ROI Orientation

After last week’s post on mobile strategy 101, I was asked, “But what about mobile marketing? Facebook is dominant on mobile, but it’s so expensive.”

I understand why many marketers have that question. If you’re a brand marketer and have a good feel for TV, traditional display, radio, and print prices, Facebook may seem high, depending on your campaign objective and product category.

Here’s an analogy that might help. Imagine that you were a perfectly rational car buyer and could purchase a vehicle that would offer you exactly the features you need and nothing more. Most buyers in a market like this would consider sports cars and SUVs to be wildly impractical. For most buyers, vehicles in these categories are over-engineered to do things 99 percent of drivers would never do, such as complete a 45 degree incline or go from 0 to 60 mph in four seconds.

Yet each category also appeals to one percenters who may really need this stuff. Car makers build for them and know that irrationality will drive most of the volume.

Marketers, unlike most auto buyers, tend to be rational. They have much more in common with the safari operator who needs an SUV to navigate some of the most challenging terrain safely. Their advertising options are priced to match the capabilities of each channel and ad product.

Television, traditional display, print and radio thrive as top-of-funnel tools. If you need to build awareness and have the budget, these work. Marketers using these tools are measured based on buying reach and frequency as efficiently as possible. For them, managing costs are critically important. The lower their costs, the more impressions they can buy.

Mobile devices, on the other hand, are useful to marketers in different ways. Their smaller screens and shorter, often more public use cases aren’t ideally suited to support 15 and 30 second TV ads. Instead, they are associated with detecting consumer intent in ways that most top-of-funnel options cannot match, and that makes mobile a powerful vehicle for marketers looking to drive conversion. For them, cost is an important consideration, but not how they’ll be assessed. Instead, they gauge success on return on ad spend or some other ROI metric. For them, generating revenue is key.

In other words, mobile is ideally suited for bottom-of-funnel marketing. It’s no surprise that Facebook and Google, the two companies that mobile consumers can least live without and that have built their businesses on acquiring detailed data about real people, are so dominant. eMarketer projects that they capture about half of all mobile ad dollars spent in the US. They deliver results and are priced accordingly.

If you’re a top-of-funnel marketer, entering an ad marketplace that caters to bottom-of-funnel buyers may be bewildering because the costs take into account the ads’ ability not merely to make people aware, but to convert them into buyers. When looked at that way, it makes sense that their costs may be higher.

What to do about it? A few months ago, I wrote about the dying days of the digital impression. The gist: because of digital’s measurability and proven performance in driving conversions and revenue, digital impressions are insignificant. They are the equivalent of buying a Ferrari to buy groceries once a week. Brand marketers can either accept under-utilizing mobile marketing channels, or they can try to find ways to blend top and bottom of funnel activity. Here’s an article describing how Lexus combines branding and performance.

If you find yourself asking why Facebook’s mobile marketing solutions are so expensive, think about ways in which you can reframe the project to be about generating meaningful, measurable value for your business instead. By changing your focus from cost to ROI, you may come to see pricing in a whole new light.

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