Five Minutes With: Mobile VR Ads will Move Industry Forward, says Arun Pattabhiraman

What are your biggest opportunities & challenges in mobile advertising for next 12-24 months?

Big brands such as Samsung, Facebook and Google are vying to bring virtual reality (VR) to the masses with products such as Gear VR, Oculus and Cardboard. With this, VR as a technology finally seems to be coming of age. In 2016, an estimated 43 million people will own VR products worldwide, and this is only set to grow to 170 million by 2018. VR has already been transforming many industries. For instance, the airline industry leverages VR to deliver disruptive in-flight entertainment experiences, the automotive industry to give customers a virtual test-drive experience, and the travel industry to create virtual destination videos to convert prospective travelers. Needless to say,  brands are also beginning to see mobile VR as an opportunity to deliver an unparalleled, engaging and unobtrusive ad experience to end users. While it is still very early days, and the technology itself will likely take a couple of years to mature, mobile VR advertising presents just the right opportunity to move the industry forward and deliver ads that are truly memorable, immersive and impactful.

In an industry that is comfortable dabbling with cutting edge technologies such as VR, hygiene issues such as measurement and attribution continue to present challenges. In a survey in Q4 of 2015 by Digiday and Marchex, measurement and attribution in mobile marketing was cited as the biggest concern by marketers. With more digital budgets shifting to mobile, brands demand higher accountability from their marketing spends, and rightfully so. With consumers interacting with the brand across multiple touch points, the biggest challenge lies in tying online and mobile interactions to offline sales. In addition, the lack of a cookie-equivalent identifier on mobile has led to the use of other unique identifiers (both deterministic and probabilistic ones) which need to be combined and used intelligently so as to be able to track the user’s mobile journey effectively – from viewing an ad, all the way to completing a transaction. Effective mobile attribution can only happen when one marries the right technology with the right data that is available across multiple channels.

What keeps your clients up at night?

Over the past year, our conversations with clients have been centered around acquiring and retaining high lifetime value (LTV) customers. While the definition of LTV varies across different types of apps and customers, advertisers across the world have moved away from measuring campaign effectiveness in simple terms such as clicks and conversions to post click engagement and LTV. For example, an advertiser promoting a taxi app cares more about acquiring users who take their first ride within seven days of installing the app. On the other hand, eCommerce customers measure the effectiveness of their campaigns based on the number of new users who make their first purchase or the number of repeat purchases made per user. With rising user acquisition costs and increasing attrition, our clients are more concerned about retaining, engaging, and maximizing value from existing users.

What’s the hardest thing to educate clients about?

When it comes to measuring the impact of mobile advertising, most advertisers don’t question the value of clicks. However, talk to them about the value of a view-through (especially one that does not generate a click), and the conversation is likely to get into a heated debate. Reports by comScore and our own InMobi network show that a large section of mobile users are non-clickers who are influenced by an ad, but do not take any immediate action. View-through attribution (VTA) – or the process of  measuring the influence of an impression in generating a conversion despite not generating a click – is a significant advancement on the mobile tracking and attribution front. Yet it is the hardest thing to educate clients about.

While resistance to VTA from mobile marketers are largely based on concerns around getting billed for users acquired organically, the benefits of leveraging the technology far outweigh the concerns. For one, view-throughs represent events that influence important upstream funnel metrics – that critical step in nudging customers from being “aware” to being “interested” in your product. Besides, optimizing a mobile ad campaign purely based on clicks might also lead to a sub-optimal campaign performance since users clicking an ad represent a miniscule percentage of users who are actually interested in the product being advertised, and often may not be a representative sample of the real-users that the campaign targeted in the first place. Some of our forward looking clients have seen significant conversion uplifts (as high as 100 percent) along with an improvement in the overall quality of users acquired. However, there is still a need to raise awareness around view-through attribution, and for it to see mass adoption in the mobile marketing space.

What are some unmet needs in marketing technology landscape?

The collision between the ad tech and marketing tech industries has been inevitable for quite sometime. However, the magic is yet to happen. From a client’s standpoint, the need is to be able to map out a clear view of the consumer journey across all touch points and nudge them at the most appropriate moment to drive discovery, engagement and transactions. While enterprises are looking for a robust CRM tool to manage their customer lifecycle, ad tech and SaaS-based CRM platforms are yet to find a way to work with each other and stitch the story together in a seamless manner. Mobile advertising platforms need to evolve quickly to solve this crucial but missing piece in the puzzle in order to stay relevant and competitive in this much-fragmented industry.

What big developments in mobile marketing do you see on the horizon?

Advertisers today have three important demands when it comes to buying ads on mobile: transparency, efficiency and precision targeting. It’s no wonder then that we are seeing a rapid shift of ad dollars to programmatic buying channels. With more than half of mobile display advertising touted to come from programmatic buying by 2018, marketers across the globe are rapidly adopting this new technology. While North America and Europe have been been early adopters of programmatic advertising,  developing markets such as India and Southeast Asia are not far behind.

Another big development in mobile marketing is video. Apart from being more engaging, video ads have seen higher click-through, conversion rates and user quality compared to other static ad formats. Mobile video as an ad format is also seeing innovations such as vertical-video and 360 degree video ads. Vertical video (shot in 9:16 aspect ratio) is one of the mobile-first video formats that has picked up significantly over the last quarter. Similarly, 360 degree videos are one of the more immersive video ad formats that couple video and rich media units to deliver a highly engaging experience for the user. Considering all these developments, video will perhaps be the most-used format by mobile marketers this year.

Arun Pattabhiraman is Vice President and Global Head of Marketing at InMobi

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