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How Brands Can Make Smarter Decisions in Mobile Marketing Strategies for Improved Media-Mix Effectiveness and Questions for Future Research

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How Brands Can Make Smarter Decisions in Mobile Marketing Strategies for Improved Media-Mix Effectiveness And Questions for Future Research VASSILIS BAKOPOULOS Editors’ Note: Mobile Marketing In 2014, the Mobile Marketing Association launched a research initiative to help individual brands Association improve the efficacy of their mobile-marketing efforts. Each case study addresses marketers’ core questions [email protected] in a unique way: What share of their overall advertising spend should be allocated to mobile marketing? How should they use mobile formats and targeting methods more efficiently to maximize the performance JOHN BARONELLO of their media investments? Although the authors acknowledge that their findings “might not provide Allstate Insurance definitive answers of long-term effect for all marketers,” they do offer insight into how mobile marketing John.Baronello@ can be optimized on a case-by-case basis. In 2017, campaign case studies with Allstate Insurance and a allstate.com major U.S. fast-food, or quick service restaurant (QSR), chain were the latest additions to a body of work with AT&T, the Coca-Cola Company, MasterCard, Walmart, and Unilever. The most striking results REX BRIGGS came from the QSR study, which estimated an optimal allocation to mobile for that campaign at 33 percent Marketing Evolution of the total media mix—the highest allocation ever recommended in this research program. In the pages rex.briggs@ that follow, the authors describe their methods and findings, and propose best practices and questions for marketingevolution.com future research. INTRODUCTION do not have a formal mobile strategy for their Since the arrival of the smartphone in 2008, con- brand, and only one out of three say they are ready sumers have embraced mobile technology faster for mobile adoption.5 Marketers, moreover, are than any previous technology.1 Smartphones unclear about the degree to which mobile drives have become the most important device to access revenue and profitability6 and its impact within the Internet.2 Consumers increasingly use these the context of their overall advertising mix. Under- mobile devices to make purchases; mobile usage standing the value of mobile is part of a much accounts for at least half the traffic and one-third bigger challenge of accurate attribution across of the revenue of e-commerce.3 Mobile’s share of all marketing channels—the process of assigning total advertising spending has increased rapidly value to a set of events or touch points that contrib- and is projected to reach 36 percent by 2020, sur- ute in some manner to a desired outcome. passing television’s share of spending, according Traditional top-down, aggregated approaches, to eMarketer.4 such as marketing-mix modeling, have addressed The rapid pace of change has left many marketers the topic of budget allocation for decades. unprepared for the new environment; two-thirds About 80 percent of marketers currently use this approach, according to Mobile Marketing Associa- 1 Benedict Evans for Andreesen Horowitz. (2016, March 29). “Presenta- 7 tion: Mobile is eating the world.” Retrieved May 3, 2017, from http://ben- tion (MMA) data. More recently, some marketers evans.com/benedictevans/2016/3/29/presentation-mobile-ate-the-world. 2 Office of Communications, United Kingdom. (2016, February). 5 WARC. (2017, May 17). “State of Industry: Mobile Marketing in “Ofcom Nations & Regions Tracker: Main set.” Retrieved Octo- North America.” Retrieved May 18, 2017, from http://bit.ly/2rx3hsY. ber 4, 2017, from https://www.ofcom.org.uk/__data/assets/pdf_ 6 CMO Survey. (2016, August). “CMO survey report: Highlights file/0030/68358/ofcom_technology_tracker_h1_2016.pdf. and Insights.” Retrieved May 3, 2017, from https://cmosurvey.org/wp- 3 Benedict Evans for Andreesen Horowitz. (2016, March 29). content/uploads/sites/11/2016/08/The_CMO_Survey-Highlights_and_ “Presentation.” Insights-Aug-2016.pdf 4 eMarketer. (2016, November 1). “US Ad Spending: eMarketer’s 7 Mobile Marketing Association. (2016, October). “Marketer Research Updated Estimates and Forecast for 2015–2020.” Retrieved May 3, Study: Marketing Productivity Assessment Attitudes.” Retrieved May 2017, from https://www.emarketer.com/Report/US-Ad-Spending- 3, 2017, from http://www.mmaglobal.com/files/documents/marketing_ eMarketers-Updated-Estimates-Forecast-20152020/2001915. productivity_assessment_marketer_study_july_2016.pdf. DOI: 10.2501/JAR-2017-052 December 2017 JOURNAL OF ADVERTISING RESEARCH 447 HOW BRANDS CAN MAKE SMARTER DECISIONS IN MOBILE MARKETING have striven to measure media effective- • How should we plan and execute for of various mobile tactics. An extensive ness at a more granular level,8 favoring mobile in the context of an integrated review of published research (Grewal, Bart, multi-touch attribution approaches that campaign? Spann, and Zubcsek, 2016) provides an appear more relevant in a cross-platform • Should we use mobile for branding, overall framework to better understand the context. Although these multi-touch attri- direct response, or both? role of mobile in the mix and the key factors bution methods show some promise, they • Are there mobile tactics that are more that influence it, including the following: have their own limitations of validation, suitable for the upper funnel versus the data quality, transparency, and the abil- lower funnel? • specific tactics, such as mobile pro- ity to unify data across channels.9 Adding • Which specific key performance indica- motions (Andrews, Luo, Zheng, and to the attribution problem is the down- tors (KPIs) should we measure and opti- Ghose, 2015), mobile gaming (Hofacker, side of mobile innovation. The increas- mize against, and how? Manchanda, Ruyter, Donaldson, and ing number of formats, platforms, and Lurie, 2016), mobile-shopper marketing targeting methods has made it extremely Acknowledging these knowledge gaps, the (Shankar et al., 2016), mobile coupons difficult for marketers to decide where MMA in 2014 initiated an industry-wide in different contexts (Ghose, Han, and to focus. research program called Smart Cross- Park, 2013), and mobile-display adver- Mobile’s key opportunity for market- Marketing Effectiveness Research (SMoX), tisements (Bart, Stephen, and Sarvary, ers—data that can tell them when, where, a series of individual-brand case studies. 2014); and how to communicate with consumers In total, 11 have been conducted in four • the importance of context (environmen- in order to maximize the impact on their countries, including AT&T, MasterCard, tal, technological, or consumer), and decision making—has made budgeting the Coca-Cola Company (four studies), how location, time, and weather influ- that much more complex. The “when,” Walmart (two studies), and Unilever. Stud- ence consumers’ reactions to mobile “where,” and “how” represent different ies with Allstate Insurance (both auto and advertising (Molitor, Reichhart, and dimensions of advertising delivery, and home) and a major U.S. fast-food or quick Spann, 2014). Research that preexisted each comes with a price (for media, data, service restaurant (QSR)10 followed in 2017. the mobile “revolution” has examined production, technology, etc.) that often is Ford Motor Co. and MillerCoors studies the impact of other variables, such as difficult to justify. Marketers thus ask: are in progress for 2018, and future work weather, on consumer behavior (Hirsh- is earmarked with a major U.S. bank and a leifer and Shumway, 2003); • What share of our overall advertising leading fashion retailer. • how mobile-display advertisements spend should be allocated to mobile Each study measures the effectiveness of work in different industries (high ver- marketing? a real cross-marketing campaign against its sus low involvement), yet with conflict- • How should we use these formats and own marketing goals and media approach. ing results (Bart et al., 2014; Shankar and targeting methods more efficiently to The current article focuses on results from Balasubramanian, 2009); maximize the performance of our media the Allstate and QSR studies. References to • the impact of mobile on conversion investments? some of the earlier SMoX studies provide goals, mainly in the context of promo- context and comparison. tional campaigns (Grewal et al., 2016). Questions about measurement, attribution, and mobile fragmentation might have dif- BACKGROUND There also is some evidence about the role ferent answers, depending on the type of What We Know that mobile can play as part of the overall campaign or even the industry and prod- Mobile still is considered an emerging advertising mix, and the multiple benefits uct type: channel within a growing body of research. of advertising across multiple platforms Researchers have explored, among other (with or without mobile) versus a single 8 Coalition of Innovative Media Measurement. (2017, Feb- themes, how this channel influences the platform. A recap of such benefits (Neijens ruary). “Current Practices in Attribution and ROI Analy- purchase-decision processes (Shankar and Voorveld, 2015) includes the ability to sis” (white paper). Retrieved May 3, 2017, from http:// cimm-us.org/wp-content/uploads/2012/07/CIMM-4As- and Balasubramanian, 2009), and there is Whitepaper_Current-Practices-in-Attribution-and-ROI- increasing evidence about the effectiveness • increase reach (e.g., Briggs, Krishnan, Analysis_February-2017.pdf and Borin, 2005; Enoch and Johnson, 9 Mobile Marketing Association. (2016, October). “Mar- keter Research Study.” 10
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