Tineka Smith caught up with Trevor Healy, CEO of Amobee, to talk about the growth of mobile advertising and what this means for the PC.
Amobee is the mobile advertising company for the big guys. We drive mobile campaigns for very large brands and agencies as well as helping large publishers' monetise their mobile applications
There's a rapid shift to mobile from PC - this is presenting a challenge to online advertising leaders. How important will mobile advertising become as this trend continues?
I read a stat recently that 54% of Fortune 500 companies don't have a mobile ready website. Also when you look at certain markets in the world like Asia, 98% of people in Indonesia have mobile phones but only 9% of them have PC's.
Mobile is not an option anymore for online advertising; it's just a mandatory thing you must do because there's no other medium on the planet where you can absolutely reach everybody. In statistical terms 90% of the world's population has phones shipped.
How do you think the market will develop over the next five years?
Quite simply it's going to get bigger. Mobile is also going to be the centre force for a lot of campaigns so we'll start seeing is mobile integrated in TV and newspaper advertising. Mobile as its own medium will become a little blurred because it's really hard to determine with smartphones where the PC ends and the mobile phone begins - effectively they're the same device.
Do you think this means that desktop pc advertising will soon be dead?
Not at all. I think that digital advertising made for the PC and desktop is still only beginning. If you look at the amount of money that's being spent on digital today it's about $70bn. Total advertising spending globally is about $500bn and $250bn is being spent on television.
As PC's continue to die out will the pricing for mobile advertising space be significantly different for traditional PC advertising?
I think it will be very similar. There doesn't seem to be any diversification between one price and the other so I don't really see that happening.
What are some of the main issues companies trying to make the switch from PC to mobile have to address?
The first issue they have to address is that it's different. A lot of people make the fundamental mistake of doing the same things they do on PC based advertising and applying that same philosophy and know-how to mobile. It's completely different - just a simple thing like screen size creates a huge issue. Every phone and user is different so targeting on mobile is not as easy as the same as it is on PC. 90% of PC's in the world are cookied by some advertiser or another but you don't have that capability on the mobile phone so you really have to get yourself educated and partner up if you want to make the switch.
What's mobile advertising consumption like across different devices?
In terms of penetration Android and Apple are still the winners. Overwhelmingly 88% of the phones out there for mobile advertising are on Android and the iPhone. When we see campaigns now we see it split equally between the two but I think that it's going to skew more towards Android over time based on the sheer nature of the cost of the phone. However, when comparing new units shipped - Samsung outsold Apple last year.
At the beginning of January 2012 In Singapore 70% of all devices were Apple devices in the smartphone market. At the end of 2012 that had dropped to one in two. So you can see there's a big shift happening towards Samsung and Android
One of your customers is Google. How are they looking to branch out in the mobile advertising space?
Google is a very innovative company and the fact that Larry Page has gone in as CEO is great for the company. However, they have a challenge on mobile because in the PC world the discovery mechanism is search. When you want to find something on your PC you use a search engine. This doesn't happen on the phone. Only 40% of interactions on the phone have to deal with search. When people are looking for something on their phone they use apps and other mechanisms. So you're going to see Google evolve in mobile. What's really encouraging about Google is they are not applying the same things online - they're being more innovative and doing very unusual things.
