Deluge of agency reviews suggests big jump for mobile budgets in 2016
A remarkable number of big brands are reviewing their media agency relationships in 2015, with the partnerships they choose likely to reflect mobile?s growing role as a must-have core strategy while laying the groundwork for a big boost to mobile ad budgets in 2016.
While it is not clear if brands such as Coca-Cola, Procter & Gamble, Citi and others have put their media agencies in review because they were unhappy with how mobile is currently being leveraged, industry insiders agree that having a well-integrated mobile practice will be one of the deciding characteristics of the agencies likely to pick up business from these brands. According to MEC, which is currently pitching two major household brands, it is not just mobile, but mobile applications that brands are particularly interested in right now.
?Native apps are more front-and-center is this round of reviews,? said Rachel Pasqua, mobile practice lead for North America at MEC. ?How should they be positioned, how can media can be used to drive deeper engagements with the apps.
?Brands have come to the realization that apps are a fundamental CRM tool,? she said. ?Their interest is not just to drive downloads, but how to create an app that will drive ongoing engagement.
?Brands have their work cut out for them, but if they can get it right, it can be a big win for them.?
The app factor
According to a number of reports, 20 or more large brands have put their media agencies in review in the past 6 months, accounting for at least $25 billion in spending. The marketers on the list include General Mills, Procter & Gamble, Volkswagen, Visa, Sony, Coca-Cola, Citi and 21st Century Fox.
Ms. Pasqua points to research from Flurry showing that chat and news apps are really the only ones capturing a significant chunk of users? time on an ongoing basis right now. This underscores how big a challenge it is for brands to create apps that customers will come back to time and again.
In a sign of just how far mobile marketing has come, Ms. Pasqua expects the winning agencies will not necessarily have a specific mobile section in their pitches. Instead, mobile will be woven throughout as an integral part of the strategy.
?I don?t think you could get past the first round if you don?t have a strong idea of how mobile will play a role every step of the way,? Ms. Pasqua said. ?It is about mobile in the context of human mobility, moving across digital touch points.
?The ones that say, ?Here is our mobile strategy,? are going to be behind the eight ball,? she said.
Mobile budgets
Considering the role that mobile is playing in the pitches, Ms. Pasqua expects to see a jump in mobile ad budgets once the new work starts to roll out.
Many in the industry have long complained that mobile budgets are too small given the significant amount of time consumers are spending on their devices.
?With what I am seeing firsthand, and in the marketplace, the emphasis that these brands are placing on reaching the mobile audience, I think you will definitely see a very strong uptick in spend,? Ms. Pasqua said.
?This year is mostly spoken for already,? she said. ?You will start to see the impact in the first and second quarters of next year.?
Video buying
Mobile expertise and capabilities will be essential for agencies that want to differentiate themselves because mobile is where consumer behavior, consumer attention and also video delivery are all going, according to Eric Bader, chief marketing officer at RadiumOne.
One key characteristic brands are likely to be looking for is that the the mobile practice is integrated with video buying, whether that emanates from the TV buyers or the digital practice.
?If mobile is just fun, clever ideas about using phones as an ad medium, they're doomed,? Mr. Bader said. ?A legitimate mobile practice must bring integrated media executions, merchandising capabilities including m-commerce, in-store and location-based, and consumer relationship executions such as loyalty, CRM and compliance applications.?
The RadiumOne executive points to agencies such as R/GA that do a lot of experimentation, research and thought-leadership as likely to win over those that are primarily mobile media planning and buying.
?But even R/GA will be neutralized if they, or any other mobile units, just gets trotted in to the pitch to show that they're progressive,? Mr. Bader said.
Mobile shift
The folks at mobile agency Somo say they are not surprised that major brands are putting incumbent agencies to the test, making sure their mobile acumen is up to scratch.
These brands are watching the successes of others who are keeping consumers engaged with mobile, using the right touch points in a contextually relevant way and want to be able to reap the benefits as well.
?It?s only a matter of time before the ad dollars follow consumer eyeballs, however up to this point, it?s always been a case of finding the right measurement to prove effectiveness,? said Emma Crowe, senior vice president of client strategy at Somo.
?Agencies have often crowbarred in measurement techniques from the desktop era (PPC, CPC, CPM), that simply don?t work well enough for mobile,? she said. ?Having the right mobile specialists onboard means brands can get a true idea of a campaign?s effectiveness and true ROI. If the right mobile specialist is appointed, there?s no doubt in my mind that the brand will see how valuable mobile is and dedicate further budget to the channel.
Final Take
Chantal Tode is senior editor on Mobile Marketer, New York