Key Developments in Mobile Advertising 2011. StrikeAd report

1. Key developments in mobile
advertising 2011
the agency view
g
omin
Overc dles
r
t he hu
What’s inside:
Average campaign spend
2011 projections
Factors limiting spend
Planning and buying trends
Unlocking budgets
1 hour campaign goal
UK mobile advertising forecasts
Sponsored by Researched & written by
StrikeAd
TM
Powering mobile advertising
www.mobilesquared.co.uk

2. About the author
Nick Lane is chief strategy analyst at mobileSQUARED. The research of this report was
conducted during March and April 2011. Nick has been covering the mobile advertis-
ing industry since 2005, and has written numerous reports and white papers on all
aspects of mobile advertising during this period for clients, provided consultancy for
some of the leading players in the mobile advertising ecosystem, and presented at
conferences all over the world.
About the mobileSQUARED
mobileSQUARED provides specialist research which enables brands, agencies and the mo-
bile industry to increase engagement with the mobile consumer. We conduct primary
research on the mobile industry and mobile consumers, with a focus on delivering ex-
clusive forward-looking data on mobile device usage, mobile web, app and commerce
trends and usage, and mobile advertising responsiveness to help clients identify and
respond to fast-changing mobile trends. And for a wider view of the industry, we
provide detailed mobile industry user and revenue forecasts.
Our clients look to mobileSQUARED’s expertise to provide candid insight into the mobile
market. We do this using our extensive global network of senior contacts to research,
collect and collate the latest data, developments, trends and insight on an ongoing
basis.
For more information www.mobilesquared.co.uk / email nick@mobilesquared.co.uk
2 Key Developments in Mobile Advertising 2011

3. Contents
Methodology 4
Survey results and analysis 5
- What does 2011 hold in store? 7
- What are the agencies telling us about planning and buying? 10
- What are the agencies telling us about the important factors
to increase their spend in mobile 12
What does this mean 17
The Mobile Campaign Client Strategy 18
The UK mobile advertising revenue-generating triumvirate 20
Conclusion 21
Source: Mobile Consumer Trends, mobileSQUARED
www.mobilesquared.co.uk 3

4. Methodology
The qualitative-based research took place between March and April 2011. Agencies
(as well as companies) involved in the process of planning and buying mobile media
inventory were either interviewed face-to-face or asked to fill out an online form on
surveymonkey.com.
The direct aim of the survey was to understand their attitude, behaviour and expecta-
tion towards the planning, buying and reporting of mobile campaigns, based on their
experience in 2010, and predictions and requirements for 2011.
Survey questions
Q1: What percentage of your clients’ campaigns will contain mobile (and mobile ele-
ment of a campaign) in 2011?
Q2: What was the average spend for mobile (including mobile element of a cam-
paign) in 2010?
Q3: By what percentage do you expect the average spend for mobile (and mobile ele-
ment of a campaign) to increase in 2011?
Q4: What is the average time spent planning and buying mobile (mobile element of a
campaign) for the client?
Q5: Which out of the following are the most important factors to speeding up the
mobile media buying and planning process?
Q6: What are the biggest hurdles that need to be overcome in order for your mobile
spend to increase significantly
Q7: What percentage of your day would you expect to spend planning, buying and
reporting on mobile?
Q8: On a scale of 1 to 5, how important is mobile to you as a part of a Brand cam-
paign (1 being least and 5 being most important)
Q9: On a scale of 1 to 5, how important is mobile to you as a part of a Direct Re-
sponse campaign (1 being least and 5 being most important)
Respondents
A total of 46 companies took part, including: ZenithOptimedia, Starcom Mediavest
Group, Mindshare, PHD Network, O2, Movement, Ogilvy, Somo, Isobar, MediaCom,
Neo@Ogilvy, Profero, Vizeum, PHD Rocket, Manning Gottlieb OMD, Mediabrands,
Fetch Media, Phonevalley, Orange, The Digital Parent Company, MediaCom North,
Amobee, Zenith, Blowfish Digital, OMD, Joule, Blyk, Aegis Media, Unanimis, MEC,
dnx, Nielsen, Adsmobi, UM London...
All research and analysis have been conducted independently by mobileSQUARED.
4 Key Developments in Mobile Advertising 2011

5. Survey results and analysis
What percentage of your clients’ campaigns will contain mobile (and mobile ele-
ment of a campaign) in 2011?
Source: mobileSQUARED
Almost 33% of agencies expect over 30% of their clients’ campaigns to contain mobile
(or an element of mobile) in 2011. While that is indeed the headline figure, a little
under 22% of agencies expect mobile to feature in 11-20% of their clients’ campaigns.
However, 39.1% of agencies expect mobile will feature in 1-10% of their clients’ cam-
paigns.
The breadth of responses really highlights the range of views concerning the impor-
tance mobile as a marketing and advertising medium plays within an overall cam-
paign from an agency’s perspective – an issue that is addressed later.
A breakdown of the agency responses that expect over 30% of their clients’ cam-
paigns will contain mobile or a mobile element, reveals that 75% of the agencies have
a strong mobile pedigree – have a mobile history, such as a pure-play mobile agency,
compared to only 25% of what would be called a traditional media agency.
In fact, 90% of responses in the 0-5% growth category were from traditional media
agencies. Similarly, approximately 80% of those respondents expecting growth of
www.mobilesquared.co.uk 5

6. between 6-25% were from a traditional media agency.
Clearly, those agencies with a deeper association with the mobile industry have a
more bullish outlook for 2011. Traditional media agencies moving into mobile are
doing so with greater scepticism, based on a necessity to cover all media, and not just
mobile.
What was the average spend for mobile (including mobile element of a campaign)
in 2010?
Source: mobileSQUARED
Of those agencies actively including mobile into their clients’ campaigns, the majority
of spend was below £50,000. A breakdown of the data reveals that 28.3% of agen-
cies’ average spend on mobile was less than £10,000, while 30.4% of agencies spent
an average of £10,001-£20,000 per mobile campaign, and 32.6% spent an average of
between £20,001-£50,000.
The good news is that some brands started flirting with bigger budgets for mobile in
2010. While only 2.2% of agencies said they spent an average of £50,001-£100,000 on
mobile campaigns in 2010, 6.5% said their average spend was in excess of £100,001.
6 Key Developments in Mobile Advertising 2011

7. There was a correlation between agencies predicting a lower growth in mobile
campaign spend for 2011, and their average mobile campaign spend for 2010. For
example, agencies that expected between 0-15% of campaigns to be mobile (or
contain a mobile element) for 2011, generally had an average mobile campaign spend
(in 2010) of between £10,000 and £20,000. Agencies projecting a greater-than 30%
increase in average mobile campaign spend, on the whole, had clients investing more
in mobile campaigns (£20,000-£50,000) in 2010. Spend in 2010 clearly has influenced
an agency’s outlook for the near-term future.
Approaching the analysis of the average spend data from a different angle altogether
reveals more intriguing trends. The number of agencies actively including mobile
within their clients’ campaigns compared to spend highlights a clear void in spend
between £50,000 and £100,000. Given that the majority of agencies expressed their
view that mobile was still seen as a largely “experimental” medium, the data indicates
what mobileSQUARED has identified as a three-phased approach to mobile advertising
spend development.
Firstly, is the experimental budget which involves a mobile campaign spend of up
to £20,000. This is followed by “Repeat Campaigns” phase, where the budget is
increased to a limit of £50,000 per campaign, allowing the agencies to explore the
mobile medium on behalf of their clients and increase the frequency of campaigns.
Phase 3 is for mobile to then become fully immersed within the brand’s marketing
mix, and in doing, the budget is raised to £100,000, leaping the financial no-man’s
land of £50,001-£100,000. mobileSQUARED calls this the “Mobile Campaign Client
Strategy” (MCCS), and will explore this in more depth in the “What does this mean?”
chapter.
Analysis of mobile campaign spend by agencies in 2010 reveals that the average mo-
bile campaign cost £33,912. What’s more, using spend as a guide, this places the ma-
jority of agencies within the “Repeat Campaigns” phase of the MCCS development.
According to research by mobileSQUARED, the average mobile campaign spend in the UK
in 2010 was £20,000. This latest research highlights that agency spend in mobile is
now higher than the average mobile campaign spend in the UK.
What does 2011 hold in store?
By what percentage do you expect the average spend for mobile (and mobile ele-
ment of a campaign) to increase in 2011?
Agencies are exercising an element of caution when it comes to 2011. Although
21.7% anticipate average spend on mobile campaigns to increase by over 30% in
2011, 65.2% of agencies expect average spend to increase between 6%-25%. Only
www.mobilesquared.co.uk 7

8. 4.3% of agencies expected mobile spend to increase by less than 5% in 2011.
By what percentage do you expect the average spend for mobile
(and mobile element of a campaign) to increase in 2011?
Source: mobileSQUARED
There is very little consistency between agency spend, penetration of mobile within
campaigns, and their projected growth in average spend for 2011. For example, of
two agencies that both said mobile will feature in over 30% of their clients’ cam-
paigns, and had an average campaign spend in 2010 of £20,000-£50,000, one was
expecting growth of 11-15% compared to 21-25%. Agencies spending in excess of
£100,000 per campaign in 2010 expected growth in 2011 of 11-15% and 26-30%.
Similarly, there was a broad response (between 0-5% all the way up to over 30%)
from those agencies spending an average of less than £10,000 per campaign and
their projected growth in 2011.
Based on the agency responses for 2011, the average mobile campaign spend to in
2011 will increase to £38,752 in 2011, up by 14.3% on 2010.
But this question also invoked additional comments from agencies. One planner said
“We have tried to get our client to do more [in mobile], but they are reluctant. I am
planning 2012 now and will be aiming to get them to invest in mobile.” While an
agency peer said “Our turnover was 7 figures and none of it was mobile advertising.”
8 Key Developments in Mobile Advertising 2011

9. What is the average time spent planning and buying mobile (mobile element of a
campaign) for the client?
Source: mobileSQUARED
The majority of time spent planning and buying a campaign is weighted very much
in favour of taking in excess of ½ a day. In total, 17.3% of agencies said planning and
buying a mobile campaign took no more than “hours”. That leaves 82.7% of agencies
claiming mobile takes up to ½ a day or longer.
To breakout that figure, 15.2% of agencies said mobile planning and buying took ½ a
day, with 13% saying the process took 1 day. The majority of agencies – 32.6% – said
mobile planning and buying took between 2-4 days, while a further 21.7% claimed it
took them over 5 days.
When considering the average mobile campaign spend for an agency was £33,912 in
2010, and taking into account the fact an agency would receive 10-15% of campaign
spend for their role in the value chain, that would be a total of £5,086, which for a
campaign that has taken in excess of 1 working week, would deliver a miniscule mar-
gin/ROI for the agency.
www.mobilesquared.co.uk 9

10. What are the agencies telling us about planning and buying?
This was another question that sparked additional feedback when it comes to devel-
oping a mobile campaign.
“We are going to plan and buy mobile campaigns on a regular basis across 16 markets.
Each campaign requires to create new tracking links, to duplicate the mobile site to
have a unique URL to give to the publisher/ ad network. Preparing a campaign will
usually require a few days, the time to coordinate with our creative mobile partner and
with the vendor.”
“We have spent endless hours coming up with innovative use of mobile for our client
but have not been able to sell anything in as of yet.”
“The market needs to do more work to get away from it being like the wild west of
advertising.”
“At present planning and implementing mobile campaigns is time consuming due to
the lack of reporting infrastructure and tracking.”
“Fragmented market makes planning and buying resource intensive. No real trading
system in place to help with the workflow from planning, transacting, optimising and
reporting as yet.”
“Process needs to be as simple as possible. Reach - Ease of use - Responsive - Reportable”
Analysis of the time spent planning and buying a mobile campaign vary massively be-
tween agencies, with some agencies clearly more advanced (or should that be more
refined?) than others. The one clear correlation between time and spend was that
the majority of campaigns costing £20,001-£50,000 would take between 2-4 days.
Responses from agencies with a stronger focus on mobile varied from “hours” to
“week +”, as indeed did the responses from the traditional media agencies. What
should be of concern for some agencies, is that planning and buying a mobile cam-
paign for £10,000 could take over a week, whereas those agencies with an average
mobile campaign spend in excess of £100,000 could complete the process between
2-4 days.
Efficiency based on time versus spend will naturally play a very influential role for an
agency when presenting mobile to a client. An agency likely to generate over £15,000
for a week’s work (based on the 15% rev share identified earlier for a campaign of
£100,000+) is much more likely to create a compelling argument for the client to
spend on mobile, compared to an agency that is plying for a £10,000 campaign.
10 Key Developments in Mobile Advertising 2011

11. Which out of the following are the most important factors to speeding up the mo-
bile media buying and planning process?
Source: mobileSQUARED
At this stage of the research, agencies could select multiple responses. There were
three clear standout factors required to speed up the planning and buying process.
Number one, amassing 60.9% of agencies was the need for more data. This was fol-
lowed by 45.7% of agencies requesting mobile standardisation. And with 41.3% of
agencies, was the need for greater understanding of the mobile medium.
The least ‘most important’ factor required to speed up the mobile media planning
and buying process was the need for an agnostic device platform (15.2% of agencies).
Attracting only 17.4% of agencies was the need for 3rd parties planning and buying,
as well as a single location to plan and book campaigns. That said, 23.9% of agencies
agreed that all six factors needed to be addressed to speed up the process.
As with previous questions, there is no correlation between the factors identified
in order to speed up the mobile planning and buying process, versus spend, and/or
www.mobilesquared.co.uk 11

12. commitment to mobile.
The only trend to emerge from the data, is that agencies active in the Repeat Cam-
paign phase of their MCCS (ie spending £20,001-£50,000), were more likely to re-
quest an agnostic device platform. Otherwise responses were random in the extreme.
An agency spending an average of £10,000 per mobile campaign is as likely to request
‘more data’, mobile standardisation’ and a ‘greater understanding of mobile’, as an
agency that will spend £20,001-£50,000 or indeed £100,001.
What are the agencies are telling us about the important factors to
increase their spend in mobile:
As with the previous question, it did evoke additional areas of concern.
“Mobile advertising can deliver superb user journeys....but agencies and their clients
are not yet delivering the best possible experiences. You still click through to websites
not mobile optimised!”
“For mobile to be considered “another browser” for the internet and allowing you to
buy inventory based on browser/Operating system.”
“Tagging, tracking and search re-targeting.”
“We have trouble selling in mobile campaigns presumably because it’s not mass and
therefore doesn’t have the visibility that clients see and understand.”
“3rd party ad-serving would really help, so we can upload all formats to one company.”
“There is a lot of knowledge with a small number of individuals, this needs to change.”
“Ad-serving, Post impression and post click tracking, tracking in general.”
“Although as understanding grows, the ‘bottleneck’ will move to the other issues in
your list.”
“Better learnings on ad network performance.”
12 Key Developments in Mobile Advertising 2011

13. What are the biggest hurdles that need to be overcome in order for your mobile
spend to increase significantly
Source: mobileSQUARED
The biggest hurdles are unique user tracking (56.5% of agencies) and third-party serv-
ing (52.2%). This was followed by 32.6% of agencies believing aggregated reporting
and real-time bidding (13%) are the third and fourth biggest hurdles, respectively. A
similar total of agencies to the previous question (23.9%) said all four issues needed
to be overcome in order to accelerate their mobile spend.
While once more, there are no obvious trends emerging from the data, the appeal of
‘unique user tracking’, aggregated reporting’ and ‘third-party serving’ are apparent
based on responses to previous questions. The demand for aggregated reporting and
third-party serving from agencies is driven by the need to increase efficiencies when
planning and buying a mobile campaign. These two factors will inevitably remove a
number of the pain-points already raised during this research process.
User tracking is different, as that justifies spend in mobile, and provides a clear return
on investment by the agencies to their clients. A transparent unique user tracking
system will also accelerate the development of the MCCS.
www.mobilesquared.co.uk 13

14. The lack of demand for real-time bidding is one of the main factors highlighting the
embryonic development of mobile advertising. This can also be supported by the
majority of agencies in the first two phases of the MCCS (Experimental and Repeat
Campaigns). Only when the brand is fully immersed in mobile, having gained a sound
understanding as to how mobile can support, supplement and compliment other
media, as well as playing a significant standalone role, will brands’ requirements for
mobile prompt their agencies to subsequently request real-time bidding, especially
with the advent of geotargeting.
Considering the hurdles that must be overcome to meet the demands emanating
from the agencies, with regard to mobile campaigns, what is the optimal time they
would like to spend planning, buying a reporting on a mobile campaign?
What percentage of your day would you expect to spend planning, buying and
reporting on mobile?
Source: mobileSQUARED
In an ideal world, only 19.6% of agencies are prepared to spend 1 day on a mobile
campaign. Of the remaining 80.4%, 37% of agencies do not expect to spend more
than 1 hour fulfilling the planning, buying and reporting process, compared to 34.8%
14 Key Developments in Mobile Advertising 2011

15. of agencies that would accept “hours” and 8.7% that would spend ½ a day.
The majority of agencies spending 5-7 days planning, buying and reporting will
be content to reduce that period to between ½ to 1 day. The majority of agencies
spending 2-4 days planning, buying and reporting, would like to see that time frame
reduced to less than 1 hour.
Clearly, ½ day would be an acceptable ceiling for the majority of agencies in terms
of planning, buying and reporting per mobile campaign, with 1 hour considered the
ultimate target.
On a scale of 1 to 5, how important is mobile to you as a part of a Brand campaign
(1 being least and 5 being most important)
Source: mobileSQUARED
If we bracket answers ‘1’ and ‘2’ as “not important”, ‘3’ as sitting “on the fence” and
‘4’ and ‘5’ as “important” then the results from the agencies are certainly compelling
reading. For instance, 23.9% of agencies claim mobile is not an important component
of a brand campaign, 41.3% of agencies sat on the fence with regard to mobile, while
34.8% viewed mobile as an important component.
www.mobilesquared.co.uk 15

16. The response to this question can be viewed positively. Already, over one-third of
agencies view mobile as an important part of the brand campaign, with another
41.3% yet to make the leap of faith into mobile and identify its overall importance to
the brand. However, given the increasing importance that mobile is now playing in
consumers’ daily lives, as a medium, it can only become more important in the adver-
tising mix, and therefore more important as part of a brand campaign.
On a scale of 1 to 5, how important is mobile to you as a part of a Direct Response
campaign (1 being least and 5 being most important)
Source: mobileSQUARED
In addition to the previous question, the results were weighted in favour of mobile as
an important component of a direct response campaign – and this certainly echoes
the agency requirement for unique user tracking, as mobile is starting to be viewed as
the missing link in the brand-to-consumer relationship.
Applying the same principles as with the previous question, 21.8% of agencies did not
place importance on mobile, 17.4% remained on the fence, while 60.8% viewed mo-
bile as an important component of a direct response campaign. Again, this figure is
only going to increase as consumers become more receptive to mobile and increasing
their propensity to engage and interact with mobile campaigns from brands.
16 Key Developments in Mobile Advertising 2011

17. What does this mean?
For the majority of agencies, mobile remains a nascent addendum that requires signifi-
cant attention for the medium to become a mainstay in their clients’ advertising strategy.
The research has identified two core areas that need to be addressed for mobile
campaign spend to significantly increase. Firstly, how mobile is positioned by the
mobile advertising ecosystem to the agencies. Secondly, how the agencies sell mobile
to their clients.
Taking one point at a time, agencies are clearly not being provided with the informa-
tion, data, knowledge and technical capability to efficiently plan, buy and report on a
mobile campaign.
In terms of important factors to be addressed in order to speed up the mobile plan-
ning and buying process, there is a clear distinction between the primary factors,
and what can be considered secondary factors. Data, mobile standardisation and a
greater understanding of the mobile medium, are the primary factors to address. Sec-
ondary factors are single location to plan and book campaigns, third-parties planning
and buying, and an agnostic device platform.
A lack of data – or as Claire Valoti, head of online and mobile at Mindshare, puts it,
“there is an abundance of data, but a lack of the right data”. The fragmentation of
the mobile industry has prompted agencies to call for mobile standardisation, but
this is symptomatic of the mobile industry and is more likely to get worse before the
situation improves. Also, agencies continue to ask for a greater understanding of the
mobile medium.
With regard to this last point, the mobile advertising ecosystem is not delivering the
relevant (or the required) information. An alternative viewpoint, is that agencies
have to spell out to the players in the mobile advertising ecosystem what exactly it is
they need to understand. Regardless, there is a clear disconnect in communication
between ‘mobile’ and ‘agency’, and this has to be identified and redressed urgently.
Furthermore, this disconnect is then effectively being extended by the agency to its
clients, and explains why a number of agencies are facing a brick wall when it comes
to selling mobile into their clients. The data suggests that media agencies are not as
effective as selling the concept of mobile to their clients compared to agencies with a
strong mobile heritage.
There are also hurdles. The most important hurdle to overcome to ensure agencies
will increase their mobile spend is the provision of unique user tracking, followed by
third-party serving, and aggregated reporting. These three areas must be the prior-
www.mobilesquared.co.uk 17

18. ity for mobile advertising solutions providers. Real-time bidding from an agency’s
perspective is a secondary requirement.
And the removal of the hurdles leads onto perhaps the most important considera-
tion of all: time. The creation of mobile campaigns is considered “time consuming”,
with the majority of agencies spending 2-4 hours developing a mobile campaign.
The target for the mobile advertising solutions providers is to create a platform that
can plan, buy, execute and then report a mobile campaign in no more than 1 hour
(excluding the time it takes for the campaign to run, naturally), although agencies will
clearly accept spending a total of ½ a day on a mobile campaign.
The fact the existing mobile campaign process takes a significant chunk out of an
agency’s week has to be considered the most important hurdle of them all to over-
come in order to unlock the wealth of advertising budgets agencies control.
The Mobile Campaign Client Strategy
The Mobile Campaign Client Strategy
Source: mobileSQUARED
As already stated in the previous chapter, the Mobile Campaign Client Strategy (MCCS)
is a three phased approach by an agency to develop their client’s mobile evolution.
18 Key Developments in Mobile Advertising 2011

19. The split in factors and hurdles to be addressed in order to speed up the mobile plan-
ning and buying process can also be closely linked to where the agency is with their
client with regard to the MCCS. With regard to the primary factors of data, mobile
standardisation and a greater understanding of the mobile medium, these are all
requirements of an agency learning and developing how to utilise the mobile op-
portunity (Phase 1 and Phase 2 of MCCS). Whereas factors such as a single location to
plan and book campaigns, third-parties planning and buying, and an agnostic device
platform, represent a more advanced understanding of mobile, and a requirement to
improve efficiencies associated with the campaign process (Phase 2 and Phase 3).
In terms of the most important hurdle to overcome, the provision of unique user
tracking, followed by third-party serving, aggregated reporting, and also real-time
bidding, would feature in an agency with more advanced mobile campaign planning
and buying requirements, such as those in Phase 2 or Phase 3 of MCCS.
This means, as agencies become more familiar with the processes involved in creating
a mobile campaign, their understanding of the complexities involved, and therefore
the hurdles associated with mobile also become more apparent. As they persist with
Repeat mobile campaigns, their demands and requirements to dramatically improve
their efficiency increase in direct correlation with their average spend per campaign.
Evolving the Mobile Campaign Client Strategy
Source: mobileSQUARED
There is good reason for agencies to use Phases 1 and 2 to introduce mobile into their
client’s advertising agenda, with the ultimate goal of total mobile immersion (Phase
3), where budgets are significantly higher. The experimental ‘legwork’ and Repeat
www.mobilesquared.co.uk 19

20. Campaign exploration of mobile, will then result in the unlocking of the big budgets,
and agencies start to receive a much improved ROI for the time spent on mobile
campaigns moving forward.
As highlighted in the previous chapter the average agency spend on mobile in 2010
was £33,912, and is expected to rise to £38,752 in 2011. An increase of 14% in a sec-
tor forecast to grow 101% in the same period.
The UK mobile advertising revenue-generating triumvirate
According to mobileSQUARED’s mobile advertising forecasts for the UK market, spend will
increase from £71.81 million in 2010 will increase by 101% in 2011 to £144.3 million,
and by 82% between 2011 to 2012, to £259.6 million.
To provide some detail into the numbers, mobileSQUARED has identified three core areas
for spend: opt-in messaging, search and banner ads. For opt-in messaging, the figure
for 2010 of £33.4 million includes what would also be deemed ‘mobile marketing’,
ranging from operator-based initiatives such as O2 More and Orange Shots, to direct-
to¬-consumer strategies from brands and businesses.
UK mobile advertising forecasts
Source: mobileSQUARED
20 Key Developments in Mobile Advertising 2011

21. Search is forecast to grow 99% between 2010 and 2011, from £10.2 million and £20.3
million. These figures are significantly below numbers released by the Internet Adver-
tising Bureau (IAB) and PwC. The IAB data said that mobile search was worth £54.9
million last year, up from £20.2 million in 2009.
However, mobileSQUARED believes the mobile search figure needs clarification as the
majority of mobile search revenues are not derived from mobile websites, but from
fixed internet sites which merely allow mobile search. The majority of the top 100
advertisers on Google still do not have mobile sites which leaves mobileSQUARED to esti-
mate the amount of UK mobile search revenues actually derived from mobile sites in
2010 was £10.2 million, meaning that over £44 million was actually spent on sites not
optimised for mobile.
Of the triumvirate of mobile advertising revenue generators in the UK, that just leaves
banner ads spend, which is forecast to grow 61% between 2010 and 2011, from £26.3
million to £42.4 million and by 52% the following year to £64.3 million.
With average agency mobile spend expected to be £38,752 in 2011, the percentage
increase in campaign spend of 14% is considerably lower than mobileSQUARED’s pro-
jected mobile advertising revenue market growth of 101%. This can be attributed to
– in part – to the increase in spend from agencies, but primarily down to the increase
in mobile campaign frequency, especially as more agencies operate within Phase 2
of MCCS, and then migrate into Phase 3. Clearly, there is an agency need to migrate
their clients into MCCS Phase 3 as soon as possible, in order to maximise their ROI
from the mobile channel.
Conclusion
Based on the research, 58.7% of agencies are in Phase 1 of their MCCS for clients,
32.6% are in Phase 2, leaving 8.7% in Phase 3 and with a foot in the door when it
comes to including ‘mobile’ within the budget for a client’s advertising strategy.
The lack of data, as well as a need for mobile standardisation, and greater dissemina-
tion of mobile knowledge throughout the agency world, is required to migrate agen-
cies in Phase 1 into Phase 2.
When an agency has passed the Experimental Phase and executing Repeat Cam-
paigns (Phase 2), is when there is a compelling need for more advanced solutions,
such as unique user tracking, third-party serving, aggregated reporting, and real-time
bidding, to increase efficiencies in terms of time spent planning, buying and report-
ing on a mobile campaign. At present, the requirement for such solutions would be
applicable to approximately 40% of the agencies.
www.mobilesquared.co.uk 21

22. As agencies create more campaigns, they will inevitably spend more time planning
and buying. The research has revealed that the majority of agencies would like to
spend a total of 1 hour planning, buying and reporting on a mobile campaign. An ele-
ment of flexibility up to 1/2 a day would be accepted by agencies operating in Phase
3 with higher budgets.
Agencies more focused on mobile are operating in a virtuous circle of higher budgets
leading to a more bullish outlook in terms of increase in average spend per mobile
campaign.
The average spend per mobile campaign by agencies will grow 14% from 2010 to
2011, however, with more agencies operating within Phase 2 and migrating into
Phase 3 of their client’s mobile strategy, the number of repeat campaigns will in-
crease in 2011, fuelling the 101% UK mobile advertising revenue growth prediction by
mobileSQUARED for 2011.
And here’s one more mobileSQUARED prediction to whet your appetite for mobile adver-
tising even more: we will see the first £1 million mobile advertising campaign in 2011.
Source: Mobile Consumer Trends, mobileSQUARED
22 Key Developments in Mobile Advertising 2011

23. StrikeAd
TM
Powering mobile advertising
StrikeAd was set up by entrepreneurs Alex Rahaman and Simon Wajcenberg in 2010 to satisfy
the global need for a streamlined media planning and buying environment on mobile. StrikeAd
FusionTM is the worlds first dedicated mobile demand side platform.
The StrikeAd Fusion platform is the first dedicated mobile advertising Demand Side Platform
(DSP) which allows advertisers, agencies and brands to quickly and transparently plan, opti-
mise and deliver effective global mobile advertising campaigns. StrikeAd Fusion allows media
buyers and planners to create dynamic campaigns across multiple Supply Side Platforms, Ad
Networks, operators and territories, reducing time, cost and complexity while offering greater
control, better data, and improved ROI.
A managed service that can be tailored for agencies who wish to buy mobile media campaigns
but don’t want to licence a technology platform. StrikeAd Engage utilises StrikeAdFusion to pur-
chase mobile advertising inventory from multiple sources and optimise performance in-house
with advanced analytics.
For more information, please visit www.strikead.com

24. UK mobile advertising consumer data points
BORDER: TYNE-TEES:
Mobile internet users with Android (1Q-4Q11) Mobile app users with iPhone (1Q-4Q11)
Q4 Q3
15 670
Q1 Q2
18,9 24, Q2 Q1
370000
277500
Q3 Q4
463 296 185000
30, 36,
92500
www.mobilesquared.co.uk
0
UK Opt-in messaging users by gender (3Q11) UK Mobile internet users
by device type (3Q11)
4400000
es
tphon
Smar
15000000
3300000
2200000 11250000
1100000 nes
repho
Featu
7500000
0
3750000
es
Ot phon
he Legacy
rs
m ar
tp
an ho 0
dr ne
iph o -6
on id - 50
e- 274 ,807
65 ,91
0,8 4
07
Mobile app users by
smartphone type (3Q11) UK Mobile advertising reach by age (4Q11)
4000000
25-34
18-24
Yorkshire
3000000
35-44
2000000
45-54
1000000
55-64
Data provided by
0
mobileSQUARED’s Mobile Consumer Trends