For mobile ads to take off, data needs to improve

Traditional advertising channels such as broadcasting and print are being rapidly eroded by online ads, driven by the opportunities provided by highly targeted media platforms like search, mobile and IPTV.

According to research released by analysts at Capgemini on Thursday, mobile advertising is the fastest growing medium among the non-traditional channels, with a CAGR (compound annual growth rate) of 66 per cent.

The consultancy firm notes that as this trend develops, different platform providers will be able to offer advertisers greater and greater levels of behavioural targeting and customer intelligence. And Renjish Kumar, a researcher with Capgemini’s TME Technology Services Lab, believes operators have a good chance of controlling this market through their proven ability to gather and build network related customer intelligence.

But in order to develop next generation customer intelligence management capabilities, operators need to build new architectures to support them. According to Kumar, key requirements include the ability to gather complex and unstructured customer profiling information; integrate with third party sources; and generate analyses that are actionable by advertisers.

Indeed, a recent report from analyst house and telecoms.com parent Informa Telecoms & Media, warned that companies will only be able to capitalise on the predicted stellar growth of mobile advertising if media planners and buyers get access to more granular data from mobile marketing campaigns. This should include data on audience composition, the number of unique visitors browsing the site, time users spent viewing an ad and ad conversion rates.

Capgemini notes that behavioural targeting offers superior value, measured in terms of a click through rate (CTR) of 0.72 per cent and cost per thousand (CPM) of up to $10, in comparison to 0.20 per cent CTR and up to $2.50 for non-targeted ads.

The consultancy reports that some target ad deployments have reported an increase in ad response rates from an average of 3-6 per cent to 13-46 per cent and customer acquisition growth of 21 per cent compared to traditional marketing.