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Foundation Capital’s Garg lays out top 5 keys to mobile advertising in 2015

Image Credit: Spotzot

Ashu Garg, Partner at Foundation Capital, tells an interesting story about chewing gum when emphasizing the radical impact mobile is having on marketing today.

Last year, chewing gum sales were down 20-25 percent, in a category where growth or decline is measured in one or two percentiles. For a while, no one could figure it out. Until they did. And the reason was mobile. Turns out that 70 percent of chewing gum sales happen in the check-out aisle at grocery stores. But now, instead of eyeing candy bars and gossip magazines while waiting to pay for their groceries, people are staring at the smartphones in their hands.

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“No one would have thought the sale of gum could be dramatically impacted by the explosion in mobile,” says Garg.

“And I don’t think the time spent on mobile devices is lost on brands. They understand the trends, but the challenge for most brands is figuring out how they respond to the explosion. What does it mean in terms of their business model?”

As a Foundation Capital partner, Garg has shepherded several startups that are helping CMOs navigate the still very-nascent mobile marketing space. One thing for certain, it’s transformed the role of the CMO into a technical one, or as Garg puts it, it has shifted it from the role of “Madmen to Mathmen.”

Garg has penned a white paper being realeased today that identifies 5 major shifts and imperatives for the C marketing suite that will be critical for leaders. In talking with VB, he spoke to how these impact mobile in particular.

All hail King ROI

It’s all about measurement, attribution, and ROI. In the context of mobile apps, brands need to act on powerful historical data, including who’s using the app, what they’re using it for, and which of the app’s capabilities they’re using. They also need to understand the app’s lifetime value, and conduct churn analysis. This data will be critical to the brand’s market segmentation efforts, and to its use of predictive marketing to optimize spend across media channels.

Garg points to Localytics (admittedly a Foundation Capital company) as being a pure-play mobile analytics solution.

Hire Math Men, not Mad Men

The second shift — where Garg really sees the move to Mathmen — is in programmatic media buying. “Most media today is still bought in a manual fashion,” says Garg. “But in order for brands to do their media buying at scale, and to make best use of the data they have, they’ll need to move to the automated buying approach.”

He points to Nanigans (not a Foundation Capital company) as an example of a leader in the mobile automated advertising space on a number of channels, particularly on Facebook.

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He also points to TubeMogul, which helps brands make the transition from traditional TV-based advertising to online video, both on web and mobile.

Publish or perish

While it’s been said for a few years now that all brands need to become publishers — i.e. producers of content — Garg says this is far more urgent for brands on mobile than on the web. “If you look at the New York Times — and it’s true for most publishers — their page views are declining,” says Garg. “The reason they’re declining is that the consumption of content happens more and more on mobile devices. And it happens in the context of about eight or nine experiences — Facebook, Twitter, Pinterest, etc. — but it does not happen on the New York Times website.”

This means that brands must figure out how to get their content in front of an audience in the context of these channels. And while some of those platforms cross over to the web, many are unique to mobile. “The line between content and advertising is completely disappearing,” continues Garg. “Brands have the opportunity to build millions of pieces of content.”

Mass personalization is not an oxymoron

The personalization of the mobile experience is critical on mobile, even more so than on the web. Consumers’ phones are far more an extension of their personal lives. So if you plan on communicating via mobile, you better be relevant. That means instead of connecting with a million people at once, “brands will connect with one person, and do it a million times over,” says Garg.

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Using platforms like Localytics, marketers are using analytics and attribution to drive personalization. “Difference in behavior will enable personalization on mobile,” Garg says. “If you’re a very active user in a brand’s app, you’ll get completely different content from someone else who may be getting notifications based on the features they use.”

Closing the deal in a customer’s hand

As Garg explains, marketing used to support sales by generating the leads that sales would later close. Those days are over, Garg says.

In the online world, you’re starting to see marketing closing the sales. But in the world of mobile, this is still very new. “Most retailers haven’t figured out how to close the deal on a mobile device,” says Garg. “Mobile still tends to be a content consumption or awareness experience, and brands are still dependent on other channels — on or offline — to close the deal.”

While he points to Amazon and Starbucks (naturally) as brand leaders who are paving the way in mobile purchases, he does believe consumer packaged goods brands are missing an opportunity in the hyper-localized/personalized context of mobile. “The odds that people will buy stuff from P&G.com are low,” he says. “However, driving targeted offers or coupons through either their own mobile app or some third-party mobile experience that allows them to close the deal when someone is standing in front of the relevant aisle in the grocery store — that’s a huge opportunity.”

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With this, he mentions Spotzot, a recently-exited Foundation Capital startup that pushes mobile coupons and offers to consumers’ phones based on their personal perferesnces and location. Acquired by Vlassis in 2015, it’s definitely a signal that mobile marketing is now being taken seriously.

Ashu Garg, Partner at Foundation Capital, will be moderating one of Mobile Summit’s fireside sessions on advertising attribution. More details on the sessions at Mobile Summit and be found on the event’s agenda page. Space is extremely limited — we’ve only got seats for a total of 180 executives — but it’s not too late to apply for one of the remaining seats.