Are Mobile Ads The Next Big Thing?

Inplace #2

Mobile is the fastest growing channel among consumers, which has media buyers taking notice. However, a new study conducted by Forrester and Velti shows that mobile advertisers aren’t approaching the mobile market with the right attitude and approach.

In short, most marketers are dropping the ball big time.

What’s happening? Ignoring most of what they’ve learned in the last decade or so, marketers are taking the “Push” approach rather than embracing the intricacies and opportunities that mobile advertising has to offer. The ads, well, they aren’t great – and people just aren’t buying.

People carry their smartphones with them everywhere, especially when they are shopping in their local communities. Are advertisers using this habit to leverage real-time location-based marketing? No. They are cramming their push-based alerts into small mobile screens. These ads are just as annoying as they were back when they flashed up on AOL in the mid-1990s!

Mobile Advertising is an Afterthought

Mobile marketers and brands may very well be sitting on the biggest opportunity of the next 50 years or so, and yet most seem to be treating it as an afterthought.

In the survey, 59 percent of marketers say that their mobile campaigns have been short-term programs, rather than part of long-term strategies.

They slap up old-school banner ads that come in one of two sizes:

  • Tiny banner ads that are so small they can’t tell you anything about the product or service except “click here.”
  • Interstitial ads that block your entire screen to ask a question or prompt an action.

Both of these techniques have been used in print media and web ads, and while people are willing to tolerate it, they don’t really like it. If media buyers and advertisers want more than tolerance, (like clickthroughs and actual sales), they’re going to need to go above and beyond.

Real-Time Bidding Advertising is Missing from the Picture

In the past two years, real-time bidding (RTB) has changed the way that digital advertising gets done, so there should be a crossover between its success in general digital advertising and the mobile world.

But there’s not. As it turns out, there’s not an easy crossover for RTB advertising and mobile technology.

Here are three ways it’s been applied (with varying degrees of success, or lack thereof):

  1. Mobile App RTB: In this model, ads are displayed inside of actual apps. Ad exchanges like Google and mobdix allow media buyers to bid via RTB on ad units. The biggest drawback? There’s no way to track who is doing what – which is a big problem for marketers who like metrics. With no cookies to speak of, there’s no historical data being generated.
  2. Mobile Browser RTB for Formatted Content: This type of mobile browser content helps you format the content to the size of your mobile screen, and (unlike app advertising) uses cookies to create historical data on your interaction with a site. However, major ad exchanges like Google, Pubmatic and Rubicon still don’t support RTB ad units for mobile formatted content.
  3. Mobile Browser RTB for Non-Formatted Content: Some websites don’t cooperate with your mobile browser and force you to zoom in and out in order to see images, read text and be exposed to ads. RTB ad units on these types of pages are pretty much pointless. It’s no fun to browse sites this way, and it’s even less fun to be hit with advertising.

Is Anyone Doing It Right?

Even though there are major failings with the implementation of mobile ads, especially with the RTB model, this doesn’t mean that everyone is missing the mark. Marketing and advertising campaigns that are designed specifically for mobile perform eight to nine times better at converting new customers.

Pandora Media, Twitter and other major online players get most of their revenue from mobile ad models. Facebook is among this group. Their third quarter revenue from mobile ads prompted a 10 percent increase in stock prices, which is welcome news after the nosedive it took shortly after the IPO.

More than 60 percent of Facebook’s user base accesses the social network through mobile devices, so the company employs a native advertising model. The ads show up in a visitor’s stream as part of the visitor’s experience, although they are noted as “Sponsored Stories.” They aren’t disruptive, tiny or annoying like typical mobile ads – and they are working well.

Worldwide mobile-ad spending will reach $6.4 billion this year and more than $23.6 billion by 2016 according to e-marketer. However, not everyone is on Facebook, and not everyone is keen on being interrupted on his or her smartphones. If media buyers can come up with a way to leverage the familiarity of the Facebook native ads with the web at large, they may be able to stop annoying and frustrating mobile users so that they can start selling to them effectively.