7 mobile ad trends for 2013: What's hot and what's not

1. Android to continue the 'mass market' smartphone momentum

Every day, more than 1.3 million Android devices are being activated, with the majority of them being priced for the mass market. In 2013 Android will cross an installed base of 1 billion users. These are massive numbers. Windows Phone 8 launched in Oct 2012 amidst a lot of fanfare. There are other new platforms in the news such as BB10, Ubuntu and Tizen, but the Android/iOS duopoly will continue given the head start these two platforms have. We will see new platforms chip away small shares, but there is nothing on the radar that will make a significant dent to the ongoing Android momentum. Over long term, it may be a different story but it is unlikely to change in 2013.

2. Smarter mobile advertising

The surging app ecosystem has caught the attention of all marketers. At the same time, mobile Internet traffic is surging across the globe, and it's beyond doubt that mobile internet will get far bigger than desktop internet. Advertisers today are now adapting their campaigns to connect with their consumers. While the buzz now surrounds smartphone advertising, soon you will see marketers leveraging the broader mobile ecosystem. Internet-enabled feature phones still dominate emerging markets (80 per cent penetration). Advertisers will have to invest time evaluating the mobile habits and behavior patterns of users to create smart campaigns that are more relevant, contextual and engaging. The growth in advertising spending will happen not only due to more advertisers leveraging the platform but also due to a significant share of spending shifting toward the medium.

3. Freemium model will flourish, blending in-app purchases with ad-based revenue

Developers using the classic in-app purchase model to monetize are seeing that only 5 to 10 per cent of their app users convert into paid transactions. With an increasing number of app users coming from emerging markets, this conversion rate will further reduce; although emerging markets have high mobile penetration, the GDP per capita is much lower, and credit-card penetration is only in the single digits. More developers will now work around to monetize the remaining 95 per cent of their app user base by plugging into telco billing for micro-transactions and using powerful mobile advertising solutions. 2013 will see premium apps come into the mobile advertising foray, and advertisers will benefit from being able to target the premium audience of these apps and games.

4. Fragmentation of the mobile-advertising ecosystem: New players, new models, new forms of mobile advertising

We are already noticing traditional online ad networks trying to extend the footprint to mobile. As mobile platforms become a part of mainstream media such as digital, this trend is likely to continue. At the same time, telcos / operator networks who missed the mobile advertising bus are still looking to get back into the game and cash in on opportunity, especially in emerging markets. We have seen Singtel making the move last year. In 2013, we will see more action for viable opportunities and partnerships to participate in the rapidly growing mobile advertising industry.

New business models and forms of mobile advertising such as incentivized, trade-ins, opt-in, push through, permission-based and some other buzzwords will get popular. Tablets will start contributing significant inventory to the overall mix, and new formats that are extremely engaging will emerge.  Overall, Display advertising on mobile will grow exponentially as a result.

5. Mobile consumers will allow brands to converge advertising, distribution and transactions

Mobile is fundamentally altering consumer lifestyle today—changing how we live, work and play! Over the past few years brands have tried to integrate mobile as part of their overall media mix. In 2013, brands will have the opportunity to take it to the next level: leveraging mobile for all the 4Ps of Marketing. Marketers are now realizing that mobile is ‘place-shifting’ purchases. That is, purchase decisions are not happening at a physical store but in the palms of the mobile consumer. Combined with the micro transaction capability of mobile, m-coupons can alter the pricing paradigm with hyper-segmented offers! As more and more consumers use their devices for making purchase decisions they traditionally made offline, the lines between advertising, distribution and transaction will blur.

6. Video on mobile will explode

The latest trend in online video is the rise of mobile viewership. As consumers get used to watching more video on their devices and on the go, publishers will significantly increase the distribution of video content on mobile. This will also present a unique opportunity for brands to leverage the mobile platform for video advertising. Given the popularity of video advertising online, mobile video Advertising will become widely accepted in 2013 as advertisers realize the benefit of targeting consumers on the go.

7. Mobile performance marketing will get mainstream

Much of the work on Mobile advertising has been focused on rich media formats and app creation. Marketers have been focused on creating mobile campaigns based on rich media formats that grab consumer attention. However, as mobile advertising now begins to get mainstream, the focus will also shift toward performance. Mobile, like all digital, is highly measurable—one will see advertisers looking for response- or outcome-focused campaigns such as leads, acquisition or any other definitive actions that enhance ROI.

Follow Vikas Gulati @vikasgulati