Wednesday 9 November 2011

Why media agencies avoid mobile

Action speaks louder than words. Yet nothing but big words have been heard from the heads of WPP, Omnicom, Ogilvy and other leading media agencies extolling the potential of mobile.

Mobile marketing is experiencing healthy growth across Europe and North America. According to researches by IAB and MMA and many more, Ad- spending has increased by 60%- 70% in average.

However, we believe that the major part of these spends can be attributed to mobile and digital agencies that work directly with brands rather than to media planners who manage the majority of the media budget.

The main reasons are:
  • Lack of knowledge: Mobile is complex and hard to understand due to multiple OS platforms and channels (SMS/MMS, Apps, Mobile Web, QR codes, etc
  • Metrics: Metrics for mobile can be extremely detailed. It's possible to track results from display advertising or messaging to retail activation. Nonetheless, interpreting the data requires some understanding
  • Incentives: According to common conventions between brands and agencies, agency fees are based on media spending and not efficiency. This means TV, print and outdoor media are more profitable for agencies

When and how will this change?
Most media agencies have formed specialised teams for mobile. But those teams are small and often overstretched. We believe that it will take another 2-3 years before media agencies start taking mobile seriously. In the meantime they will lose business and the opportunity to learn from smaller more specialised agencies. 

No comments: