$500 CPMs?
by Steve Smith , Tuesday, April 24, 2012

It isn’t easy to impress sleep-deprived and constitutionally aloof college students with a cell phone. But I got a real rise out of a college class several years ago when I brought in the first Android phone as part of a gadget show-and-tell and showed them how ShopSavvy worked. I grabbed a Pepsi from a fellow in the front row and scanned its UPC code to bring up a polished page of details, including where nearby they could pick one up. “Whoa!” some of them said in teen parlance. They got it.

This kind of app now is commonplace and has spun off into a number of variations from both first-party retailers and third-party shopping app providers. But we still are only beginning to understand how mobile works in the aisle. The power of bringing the cloud of data and resources down to the point of sale and the point of need is monstrously powerful. This is not only tapping into a time and place, but that mood of consumption that can go in several directions. The consumer might indeed be poached by a rival retailer, as Amazon has ventured to do of late. But the in-store shopping app can also help drive a person toward the item they already are viewing on that retailer’s shelf.

Despite the reputation of shopping apps as poaching devices that turn retail stores into showrooms for online buys, the opposite may also be true, says Jim Barkow, co-founder of Longboard Media, which runs advertising into the ShopSavvy app. “Often the mobile app can reinforce the decision of buying in the store. The price differential to online may be nominal and may push in-store sales.” While obviously some real research needs to be done on this question, it seems reasonable that an app can convince the typical shopper that he or she is not going to find a better deal online — or at least not find enough of a deal to matter.

What we do know about mobile use in retail is that it taps into consumers at the height of a very energetic decision process. “The interactions are off the charts,” says Longboard’s other co-founder Scott Engler. Longboard serves ads into retail Web sites for Overstock.com, NewEgg and RadioShack. But the difference between people in shopping mode on their desktop and actually in-store is phenomenal, as Engler and Barkow observe. Since starting to feed ads into ShopSavvy they have seen users escalate their activity to referencing 30 products a month. Between 15 and 17 million people are using the app across the available platforms. The company also partners with Spotzot to drive ads into its deals engine that drives other shopping apps.

“Believe it or not, month after month, the most-scanned products are milk and other consumer packaged goods,” says Barkow. People are doing price checks and local availability checks. “Mobile mostly is out of the office and out-of-home,” says Barkow. “It is always localized and almost always in an actual store.”

Getting advertising, whether competitive product offers or general branding messages, at that point of heightened consumer awareness is proving extremely valuable. “CPMs are north of $500 for ShopSavvy,” says Engler. “We are getting 30%-plus click-through rates.”

Alexander Muse, co-founder of ShopSavvy, confirms the CPMs and the levels of interactivity. He tells me that on non-targeted ads, they may see CTRs down around 10% to 30%. “When we target based on product and location, they climb to over 30%,” he says.

It seems plausible that at least for now, people will follow even irrelevant ads when in shopping mode. When I played with the latest version of ShopSavvy, for instance, a scan of a Halls cough drop package rendered a handsome page with a moving image of the product, links to prices and availability — but also a prominent link to an HP products page. PC printers and cough drops? Well, here still is the novelty factor of in-app advertising, and the share of voice here is singular. But one has to wonder how much being in the throes of shopping mode also just makes us receptive to marketing messages — no matter how irrelevant.

Muse confirms that when the advertising becomes category-specific and well-targeted, the price of entry is considerable.  “Our average CPM is $500,” he claims. “We sell them as $.50 targeted exposures.”

Barkow says that retailers and brands can leverage this level of interactivity and shopping energy in many ways beyond mere advertising. He believes targeted content will be the future of in-store shopping app promotions. “If someone is doing a price check, we can use mobile not just to push an ad unit, but to push more content. They need reviews and more detailed specs. We should be able to use mobile distribution to push more content at the point of purchase.”

Which is another way of saying what some of us have been saying about this platform from the beginning. Mobile is marketing’s big chance to get beyond advertising. This is where your brand moves off the centuries-old stage of being the annoying carnival barker we tolerate because he gives away tickets to the show. Now the marketer gets a chance to come off the stage and be a real part of the audience, enhance and enrich their experience and become a partner/companion — not just a shill.

Getting into the store aisle shouldn’t just be an opportunity to poach and pitch. That is a message with a very short shelf life. There is greater value to be added than that.

Steve Smith is the editor of Mobile Marketing Daily at Mediapost where he covers all aspects of the mobile landscape and writes the daily MoBlog and regular Mobile Insider columns. He also programs the OMMA Mobile/Display/Data and Behavioral series of shows and the Mobile Insider Summits. A recovering academic who taught media studies at Brown and University of Virginia, he spent the last decade as a digital media critic for numerous publications and as consultant. He also writes for Media Industry Newsletter and eContent magazine. Contact him here.