There is currently an imbalance in supply and demand in the mobile advertising market. There is no shortage of mobile websites, portals and apps out there to advertise on, but there are not enough big spending advertisers to fill the inventory with high-value ads. The majority of publishers are the long tail, using blind ad networks (such as AdMob) to sell their inventory on a CPC basis. The kind of advertisers using these ad networks have to be comfortable with a loss of control over where and how their ads are displayed. Mobile content companies and small-time advertisers abound, with the ringtone and adult entertainment sector being notably well represented. Much of this advertising is taking limited or no advantage of the benefits the mobile channel offers such as location awareness or demographic / behavioural targeting.
There are big brands advertising on mobile, but in a different way and in small doses; they are often working with agencies and ad networks that can tell them which sites their ads will be displayed on and the user demographics of those sites because it’s important to control their brand image. They are also advertising on the iPhone where they can find more well-off consumers, despite in some cases losing control over which apps their ads will appear in.
For mobile advertising to really take off, the big brands and non-mobile companies need to spend more money on it, which will be driven by:
- More control over the quality of their ad campaigns, driven largely by greater smartphone adoption and data speeds
- Greater confidence in where and how their ads are displayed so they can control their brand image
- More accurate measurement of ads, which depends on agencies and ad networks providing improved ad performance data in a way that can be aggregated and compared, and also on better analytics of what happens on the advertiser’s properties in order to give an accurate end to end picture of short and long term ad performance and ROI
- Greater cross-channel integration of the conception, delivery and measurement of ad campaigns across multiple media in addition to mobile.
I think that the technical challenge of ad delivery to a fragmented mobile device base is largely on the way to being solved. The measurement of unique users and understanding who they in greater depth are has not … but this is an envisioned advantage of mobile over traditional media, and I do not see it as a brake for growth right now. And since most of the privacy issues are again associated with the new envisioned capabilities of mobile, they are in my opinion simply (though not straightforwardly) something that needs to be managed as the industry continues to innovate.
Image attributed to: http://www.flickr.com/photos/celinet/ / CC BY-SA 2.0
Tags: CPC, CPM, market, measurement, premium, transparency