Our Digital Media Correspondent Levi Shapiro, provides interesting insights into the Latin mobile advertising sector in this analysis piece.

Mobile telephony is on the rise in Latin America. Driven by booming sales of low-end models, shipments of smartphone will rise to account for more than half of the worldwide cellphone market in 2015, according to a report from IHS, analysis provider. “With their affordable prices, low-end smart phones are attractive to first-time users and to consumers in emerging economies where subscriber levels are rising at the fastest rates of all regions of the world”, said Francis Sideco, senior principal analyst, wireless communications for IHS.

Brazil is one of the largest markets in Latin America for mobile telephony.  According to TyN, in July of this year the number of mobile users in that country reached 220 million, which is equivalent to a market penetration of 113% per 100 inhabitants.  The three major telcos operating in and leading the market in Brazil are Telefónica’s Vivo, with a 29.53% market share; Telecom Italia’s TIM, placing second with 25.78% market share; and America Movil's Claro, displaced to third place with 25.51% of the country’s mobile operations.

In the USA, the first half of 2011, telecommunications and automotive were the two largest mobile advertising categories (Nielsen). Video (4.7%) is the least deployed, but fastest growing, mobile ad format. Mobile search (28.5%) is the next largest, followed by banners (30.7%). Finally, because every handset is capable of SMS, the most widely deployed mobile ad format is still messaging (36.1%). Many were surprised by the comments of Gavin Mehrotra, Director of International Media for Coca-Cola, at the Mobile Marketing Association conference in April. "SMS is the number one priority at Coca-Cola in mobile". He cited mobile web as number two, with Smartphone apps as a very distant number three.

Historically, the higher response rates for mobile campaigns can be attributed to the novelty of the platform. However, according to ad campaign effectiveness measurement company Dynamic Logic, the quality of the creative has now become the most important factor.

Mobile marketing campaigns considered to be effective include a strong call to action and clear branding. On the other hand, ads that repurpose online creative or overwhelm the small screen with text or logos actually reduce brand favorability and purchase intent.

A global study by advertising agency BBDO defines our relationship with mobile as analogous to a relationship with a New Lover. We prefer to be alone with this very personal device and do not appreciate intrusions…unless it makes us better somehow or is tailored to our needs.

 

[youtube http://www.youtube.com/watch?v=dMtaNcRCWck?rel=0]

Apps and mobile web are the two most popular mobile ad formats. The main challenge holding back larger budgets for Hispanic mobile advertising is no longer technical- it is creative. 

Three examples of good creative are included below:

1-Universal Studios: "Fast Five" Hispanic Mobile Campaign

Universal Studios sought to tap into the Hispanic audience's affinity for rich media on Smartphones with a mobile video and banner ad campaign for their film "Fast Five".  Hispanics represent 15% of the population but only 12-13% of movie-going public. Ad Agency Lopez Negrete developed a creative execution emphasizing mobile video and banners. One third of those that clicked on the banners watched the entire trailer. The greatest response came form pre-app video ads, achieving 3.77% Click Through Rates (CTR), the highest of the entire digital campaign.

 

[youtube http://www.youtube.com/watch?v=hagZyE2df88?rel=0]

2- K&G Men's Wearhouse: SMS Coupons

Recognizing the mobile media usage of their target customer, African-Americans and Hispanic males, age 25-54, Atlanta-based K&G Men's Wearhouse implemented an SMS couponing campaign to drive in-store traffic and sales. Participants receive four messages monthly about events, alerts, coupons, etc.

The customer receives a coupon with a unique code that must be keyed into the POS system. This is followed with a double opt-in that sends customers a message to verify they want to participate. Once opted in, customers receive four messages each month from K&G. The redemption rate for the program in the first four months was 93 percent.

3- Nike + GPS- "Beat Your Best" iPhone Application

Leveraging the GPS capability included in all Android and iPhone devices, Nike transforms a solitary experience into a shared, social networking engagement. Runners, both in English and Spanish, can monitor, store upload and post each run to their online social network. This "branded utility" maintains an ongoing relationship between the consumer and the brand is accessed again and again.

One billion dollars is a lot of money. However, it is still less than one percent of 2011 total US advertising expenditures. Although mobile advertising is now the fastest growing ad medium in history, further growth will be dependent on the quality of the creative.

[youtube http://www.youtube.com/watch?v=bV0VhMXZuTI?rel=0]

 


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