According to media buying executives at this week’s Mobile Marketing association Forum the mobile ad industry is simply asking too much for such a relatively small market.
“Most of the brands for whom we do investment advisory are not going to buy $60, $70 or $80 CPMs, even if that’s what the market demand is right now,” Eric Bader, senior VP at MediaVest USA.
He went on to say, “When you start to look at how effective search and the yellow pages and directory services are, that’s who [mobile is] going to be competing against and those CPMs are down in the $4 to $10 range.”
“And while we all understand the virtues of what mobile advertising can deliver,” he said, “at [$60-$80] CPM levels, it’s really, really hard to justify mobile against other opportunities to get the message to the same target.”
Maria Mandel, director of digital innovation at Ogilvy Interactive, chimed in, “The reality is you only have 15% of people surfing the mobile Internet. That’s still a very small base.”
Mobile marketing, while promising, seems to be suffering from several issues. First, the relatively low percentage of Americans who use their “third screen” for anything other than cell phone caller ID.
Second, since most people pay for cell phone and data service by the minute they simply don’t want to be bothered by ads that increase already slow download time. Third, while it is convenient, mobile
Internet connection quality varies greatly from network to network and region to region. Let’s face it, the reason mobile marketing has boomed in Japan and Korea and to a lesser extent in Europe is because the population density is so much higher. It takes a lot more infrastructure to cover America in reliable mobile web access.