Can You Believe This?

“A study released today by mobile analytics company NinthDecimal reports that 70% of consumers in 2014's third quarter bought new packaged goods products after being served mobile ads.” So said this article in a DM News newsletter I received recently, claiming that “there’s mass in mobile”. 70% of consumers bought something because of a mobile ad? That seems a little unlikely. Time to apply a sense check, because that seems kind of high.

Before even wading into the numbers from the article, let’s get a sense of the scope of the mobile market. The US population greater than 13 years of age is approximately 275MM, and comScore reported in May 2014 that there were 166MM smartphones, representing 68.8 percent mobile market penetration, which means almost 70% of mobile phone owners have smartphones, and can receive mobile ads. (The ratio of mobile phones to population is about 88%, but some people have more than one phone.) Assuming the NinthDecimal report refers to adults, we can assume the same ratios apply to the 241MM that are over 18, although it is probably lower since much older adults are less likely to own mobile phones, especially smartphones.

Now back to the study. They show numbers in only a few places in the article:

  • “Consumers exposed to mobile ads for CPG products showed a 75% increase in store visits over a control group of similar segments, and a 96% lift over the general population.”
  • “Some 57% of consumers charted by NinthDecimal in Q3 2014 had store apps on their devices, compared to 30% with CPG brand apps and 26% with digital coupon apps.”
  • “The gross numbers on mobile connectivity at retail are becoming “mass” enough for lots of CPG stalwarts to take notice. Sixty-nine percent of consumers saved coupons to their devices during last year's third quarter and 59% used them to make their shopping lists.”

I don’t see how any of that adds up to 70% of consumers buying new products after being exposed to mobile ads, never mind the fact that it just isn’t supported by the smartphone penetration numbers. For example, showing a 75% increase in store visits isn’t meaningful unless you know the baseline – if 4% of the control group visit and 3% of the exposed group visit, you get a 75% lift, but nothing indicative of significant impact, like an increase from 40% to 70% might show. I thought maybe the article just mis-stated something but no, the NinthDecimal webiste says the same thing: “70% of consumers tried a new CPG product or brand after seeing a mobile ad in 2014”. It also says “59% of consumers use their mobile device while grocery shopping” which seems high, based on personal observation, but maybe because I’m more likely to be in a suburban store than urban?

Maybe they need to use some qualifiers in their descriptions. For instance, if it was “59% of consumers used their mobile device while grocery shopping at least once during the year” it might be more reasonable than suggesting that I should see more than half of shoppers tapping on their phone during a typical visit to the store, which I don’t. Or maybe I’m just not shopping in a tech-savvy neighborhood.

Posted by jkeenan on 02/03