Estimating your Mobile Marketing Budget: A Useful Framework

by Alex from London

It's no secret that marketers have been slow to adjust and re-balance their media mix to reflect the increasingly mobile-centric world. According to a report from IT services provider Tata Consultancy Services (TCS) marketers spend $1.59m per $1bn in revenue in Europe 2012 and $1.43m in North America. By 2015 this amount will increase to $1.76m in Europe and $1.98m in North America. This represents a year-on-year increase of 3.4% for Europe and 11.5% for North America, barely enough to keep up with the exponential adoption of smartphones. In fact, marketers currently allocate less than 1% of their marketing budget to Mobile advertising. According to a study released by the MMA, titled “MXS: Mobile's X% Solution” and conducted by marketing ROI specialist firm Marketing Evolution, the optimized level of spend in Mobile advertising for U.S. marketers is 7%, or about the same as the amount spent on online display and sponsorships in 2011. The optimum share varies according to industry category, marketing goals and size of budget. For “high involvement" categories such as auto and finance, the proportion should skew a bit higher at 9%. Conversely, in “low involvement” categories like CPG and entertainment, the share would dip down to 5%. Campaigns aimed at building awareness would also have a smaller allocation for mobile (5%), while those geared toward boosting purchase intent and consideration would increase the share to 8%. Are marketers missing an opportunity? So much focus is placed on media that delivers brand awareness, but what happens when that interest turns into consideration and your customer wants to take action?  We believe that mobile is the perfect platform to convert that interest from physical media into real action via digital.  Whether you want a Like or an email opt-in, or a purchase - mobile tactics like QR Codes can deliver big time! For expert advice on QR Codes and mobile engagement, please visit www.scanlife.com or join the discussions on the “Exchanging Smarter Ideas on Mobile Engagement” LinkedIn group.