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Mobile should take 15% adspend

News, 18 August 2015

SHANGHAI: Brands can achieve significant improvements in campaign performance by increasing their share of spending on mobile to between 8% and 15% according to a study for The Coca-Cola Company in China.

A Smart Mobile Cross Marketing Effectiveness (SMoX) study conducted by the Mobile Marketing Association (MMA) assessed the economic value of mobile compared to traditional marketing channels and found that mobile at 8% of total budget drives 7% of the profit and mobile at 15% drives 16% of profits.

"We have begun to see a number of truths about mobile that provide a clear path forward, especially around marketing effectiveness," said Tom Daly, group director/Global Connections at The Coca-Cola Company.

Greg Stuart, CEO of the MMA, added that while there was an acknowledged gap between consumer behaviour and brand spending on mobile, "there is real, indisputable proof on the value of mobile to a brand's business goals".

The study further found that mobile offered nearly double the ROI over TV and was twice as efficient in driving sales compared to the campaign on average.

And mobile video emerged as significantly more effective – around three times more – than TV or digital video. This was, then MMA noted, a greater increase than the strong trends that had been observed for mobile video in similar US studies.

Finally, mobile display was shown to drive purchase intent, while mobile social drove both purchase intent and engagement.

Rohit Dadwal, managing director of the MMA in Asia Pacific, welcomed the study.

"It is a great data set for marketers to reassess and optimize their spending with the most impactful allocations in their marketing mix, while leveraging mobile with double digit spend," he said.

"As an industry, it is time we learned the effectiveness of the channel to aid marketers with their ambitions, and kept pace with consumers to understand the power of mobile."

A separate study from Warc, due to be released in conjunction with MMA Asia Pacific later this year, finds that typically mobile is being assigned 5% or less of marketing budgets across the region.

The survey also notes that all respondents expect this share to have risen, if not doubled, by 2020.

Data sourced from MMA ; additional content by Warc staff