2014 Predictions: The year ahead for...Mobile

'Mobile first' will become the byword for smart businesses; native ads and programmatic buying will proliferate; and messaging will overtake social, James Connelly predicts.

James Connelly
James Connelly

I find myself starting with "2014, the year of mobile", just for my own entertainment. Ah, the simple things.

As the words stay on the screen, I recall how I banned everyone at Fetch from uttering them two years ago, yet they seem to have made my final edit. Why?

For those who don’t follow, this phrase has haunted the industry for years, because the marketing world has been awaiting a year when mobile marketing would "pop". Mobile actually "popped" back in 2007 when Steve Jobs unveiled the iPhone. The fact is that many marketers have never really understood what mobile is and how to deal with it.

Before we peer into the future, let’s consider what mobile is exactly.

The magnitude of mobile

A device to one business and a behaviour to another, mobile is really the catalyst for a digital revolution.

As hardware, mobile has facilitated the notion of connected devices. The predominant devices – the smartphone and the tablet – have caused the most disruption. Ninety per cent of tablet usage is in the home: not very "mobile". Or is it? It runs a mobile operating system, it has apps, it is typically touch-screen only and it looks like a large phone. Is it mobile? Yes. It’s a connected device in our multiscreen ecosystem.

Mobile is also a behaviour. We expect the world at our fingertips. This behaviour is changing our lives: the way we shop, commute, talk to our spouse, watch TV – even the way we participate in the bedroom (9 per cent of Americans admitted to using their smartphone during sex, according to a recent study).

But let us be clear about this. People (not consumers; it’s bigger than that) are not thinking about mobile, desktop, social and TV. What they are doing is Tweeting, laughing, poking, buying, watching, smiling and grieving on whatever device that is convenient and appropriate. Mobiles and tablets have been outselling PCs since 2012 and the average mobile user reaches for their device more than 150 times a day. Take note: we are living in a post-PC world where mobile enables and empowers us to stay better and more frequently connected than any advertising medium before it. Now the scene is set, here are my 2014 predictions.

Smart business go ‘mobile first’

The "mobile-first" approach will no longer be reserved for mobile-centric businesses, but adopted by smart businesses that understand their customers are connected more often than not. The strategic starting point will be a mobile experience (rather than bolting mobile on as an afterthought) with everything building out from there. So the big picture is one thing, but what will the game-changers for this year be?

Recreating the Facebook model

As with consumers, mobile advertising is evolving. I’ll view 2013 as the year Facebook scaled its mobile offering. We all expected it, but no-one really knew how well it would work. So hats off to Facebook – it delivered a truly scalable advertising platform for brands and businesses globally. This has set our 2014 agenda.

Facebook more than doubled its profit in October last year, and it’s no surprise that mobile accounted for half of its overall ad revenue of $1.8 billion. Ads on Facebook are widely known as "native advertising": a paid-for ad, contextually placed in an editorial environment of a publisher, typically looking more like content. This year will see other mobile media stakeholders looking to replicate the model and success Facebook has already achieved.

But Facebook is unique. The native feature alone did not create the success. When you really strip its mobile offering back, you get a transparent, highly targeted, truly scalable, data-led media buy, where the performance of the ad relies equally on both the placement and the creative.

Facebook’s success is the combination of both native advertising and programmatic buying, and that sets out two key trends for 2014.

The average mobile user reaches for their device more than 150 times a day. We are living in a world where mobile enables us to stay better connected than any advertising medium before it

Advertising should deliver value, and this is where I agree with James Hilton, the co-founder of AKQA, who felt that advertising can be "pollution" and that "add-vertising" – the notion of adding value to a user, such as through a data-led recommendation – is where the focus should lie.

If a publisher understands their customer better, they can make advertising more relevant, thus improving the value of their inventory to advertisers. Some businesses are doing this already. Zeebox, for example, is using audio triggering to listen to what users are watching on TV in order to serve a more relevant in-app advertising experience, and both Snapchat and Instagram have trialled native advertising formats, with more scalable offerings expected later this year.

Programmatic buys

As native advertising is not the sole driver of Facebook’s success, so this brings me to the second element: programmatic buys – a transparent and data-led media buy at true scale. As we know, programmatic exists outside of Facebook and is currently a $12 billion global market, expected to triple to $32 billion in 2017. This is a key growth area for 2014 and it is where we can expect real-time bidding (RTB) and other programmatic mobile media buying to gain traction.

Why? Because buyers are looking for more transparency to avoid paying third, fourth and fifth parties unnecessary shares of each advertising dollar. But the real catalyst to transparency is the requirement of user and publisher data to drive more efficient media purchase and the need to find higher-quality customers.

Programmatic buying can happen in a number of ways. RTB has been the most-talked-about element and is commonly associated with bidding on what I call "long tail exchange inventory" in mobile. 2014 will see programmatic buying become more available on greater quality inventory bought via RTB. In the US, RTB spend is expected to increase by 35.5 per cent in 2014.

The key ingredient to this growth is publishers. They typically measure their value via their inventory but they will understand that the data behind their audience can be equally valuable. A good example is Twitter’s acquisition of MoPub, the second-largest mobile ad exchange. Twitter moved not only to maximise its own inventory but also to overlay its contextual data with external inventory.

Moving from social to messaging

2014 will not just be a year for native advertising and programmatic buying, but also for a new kind of publisher in mobile. Messaging apps such as Snapchat, Viber, KakaoTalk and WhatsApp have become popular tools for social communication. Four times as many images are shared on Snapchat than Facebook’s Instagram, while Viber and Tango are taking on masses of voice and video native messaging fans. Instagram’s recent app update enables users to send private photo messages to each other, demonstrating that even a social network with millions of users is responding to the growing importance of personal messaging.

Keep an eye on this: 2014 will see a transition from social to messaging. To stay competitive, players within the social messaging space will develop services that move beyond communications. These could include social gaming integration, payment tools and utilities that integrate into a user’s lifestyle. Social messaging apps will continue to advance into mobile media platforms, producing contextually relevant services for users. This year, users will not be obliged to only access services through a social network or brand; they will be able to access a service on its own, while this service will be integrated into several channels including social media. This turns a horizontal service platform into the glue that holds many user-specific utilities together.

So 2014 will be a transitional year for mobile, a year of growing up and, of course, continued unprecedented growth. It is exciting to be involved in this sector; a sector that is shaping the future of communications.

James Connelly is the founder and chief executive of Fetch