Why advertisers need to take advantage of 5G technology

Mobile technology has been developing rapidly over the last 40 years, driven by the consumers’ demand for reliable mobile connectivity, regardless of their location (Ofcom, 2018). The most recent generation of such technology is 5G, launched by all four main UK providers in 2019. This essay will first outline the core characteristics of 5G technology through discussing its application to the advertising industry. It will then go on to explore the issues that advertisers face as it becomes established and the responses that could help tackle them.

5G builds on the capabilities of the widely used 4G and its two main characteristics are faster speeds and reduced latency of mobile networks (Ofcom, 2020). The quicker response times and the reduced delay create opportunities for advertisers by supporting the extensive application of creative formats, such as interactive mobile ads and video, and technologies, such as AR and VR (Anon, 2019), which have been around for a while but have not been utilized fully due to the limited capacity of mobile networks until now (Ofcom, 2020). Furthermore, these attributes will allow for a much quicker data transfer which can enable more precise audience targeting.

Improved user experience

5G mobile networks are far more reliable and the user experience will improve significantly. While 4G enabled and improved interactions among people through mobile devices (Schwab, 2016), 5G goes beyond this with its increased capacity, allowing the connection of more devices and the development of the Internet of Things (Ofcom, 2018). Furthermore, Xiang (2020) argues that the capabilities of 5G will not only improve the user’s online experience, but they can extend the internet to “another human sensory system” (p.372), meaning that there could be a big shift in the way digital advertising is planned and implemented.

5G creates opportunities for advertisers and they need to take advantage of them to keep up with the high demands of their consumers. However, they will also face numerous challenges, particularly in the near future, as the new technology becomes established.

5G allows for more data to be collected from various touchpoints and processed instantaneously (Ofcom, 2018), so collecting this information and using it in an ethical manner which is compliant with GDPR will be one of the issues that advertisers face. Practitioners in the industry comment that 5G will enable advertisers to gather more insights about their target audience in real time, taking ad personalization to a new level (Cribben, 2019). However, Broughton (2019) warns that while this will arm advertisers with invaluable knowledge of their consumers, it is crucial they have the right infrastructure, technology and privacy policies in place. This means that advertisers need to invest in developing these before they can utilize the data that will become available.

Increased mobile data consumption

Mobile data consumption has been growing as connectivity has become better with the development of new generations of mobile technology (Ofcom, 2019) so it is expected that the share of mobile data in the overall data consumption will increase even further as 5G is established. Advertisers need to reconsider their media mix and address this in their digital media strategies by allocating a higher proportion of the budget to mobile placements and formats. However, although users spend more time online and on their mobile devices (IAB, 2020), advertisers need to keep in mind that brand building is still a key driver of campaign effectiveness (Binet and Field, 2018) and traditional media plays a key part in this (Binet and Field, 2017). Therefore, they need to find the right balance between traditional and digital media and brand-building and activation channels, based on their budget and objectives.

Video is the main driver of the increase in mobile data consumption (Ofcom, 2019; IPA, 2020) and it is likely to grow even further with 5G, creating more inventory and opportunities to reach people online. There already is a shift towards creating more video content, however, Katherine Hansford (2019), mobile specialist at Zenith, warns that advertisers need to ensure that their videos are truly engaging, relevant and enhancing the experience of the consumer.

For example, Shutterstock recreated in stock footage an expensive Fyre Festival video, aiming to promote the cost-effectiveness and convenience of using its high-quality footage collection. The video was targeted at people in the creative industry and released when conversations regarding the high cost of the original video had already started (Arthurs, 2019). This campaign proves that videos which are topical, relevant and spark a conversation among the target audience help advertisers tackle issues related to low tolerance for poor ad placements and can result in hugely successful campaigns.

The fast speed and low latency of 5G increase the consumers’ demand for high-quality, entertaining content (Anon, 2019) which creates further challenges for advertisers. The utilization of video and interactive mobile ads as well as AR and VR technologies can help advertisers respond to this demand. A great example of this is the Burger King campaign whereby consumers could launch the Burger King app and point their smartphones to a competitor’s advert. This would set the ad on fire and turn it into a Burger King ad in AR, revealing a voucher for a free Whopper (O’Brien, 2019). The creation of such campaigns requires higher investment, so advertisers need to allocate a higher proportion of their budget to creative production. This would leave them with a smaller media budget, therefore challenging them to be smarter with their media selection and targeting.

In conclusion, this essay has set out the core characteristics of 5G technology and its relevance to the advertising industry. It has become clear that the fast speed, low latency and high reliability of the new generation of mobile networks will create numerous opportunities, but their adoption will create some issues that advertisers need to face. In order to take full advantage of the 5G capabilities, advertisers need to ensure they have the right technology and privacy policies in place to process all the additional data that will become available. Furthermore, they need to consider the benefits of using video, interactive ads, AR and VR and whether these will enhance the online experience of their target audience. However, if advertisers want to deliver successful campaigns in the long run, it is essential that they do not shift their attention fully towards digital media and creative development and overlook their targeting and optimum media mix selection.

Petya Shumakova is a Senior Media Executive at The Media Shop Scotland. This essay earned her a Distinction for the IPA Advanced Certificate in Communications Planning.