Mobile advertising is a hot topic in emerging media. As more of us spend our time on smartphones and tablets, it’s becoming increasingly important for advertisers to reach us where we are. Mobile is an interesting topic because while it only accounts for 5% of digital spending, it increased by 149% in 2011 and shows no signs of slowing.
Marketers have been a bit perplexed about how to tackle this new (profitable) beast. For the first time, people are spending more time on mobile apps than they are on the web. But, unlike ads on our desktops, today’s mobile browsers do not support cookies. This has forced advertisers to rely on other information, such as the mobile device’s unique ID number, which gives the advertiser far less data about the user to go on.
This lack of consumer data coupled with questions about content consumption habits, multiple platforms, use of apps, lack of media rich ads, and evolving measurements, make mobile a more than a little complicated. Mashable has a great article outlining how each of the above-mentioned issues is making mobile a complete headache for marketers.
And yet, despite these complications, there is no turning back. Mobile advertising in the US totaled $1.60 billion during the full year 2011, a 149% increase from the prior year total of $0.64 billion. So, why then, are mobile ads still so undervalued? Wall Street analyst, Mary Meeker, conducted a study showing that the effective cost per thousand impressions (CPM) for desktop web ads is about $3.50, while the CPM for mobile ads is just $0.75. What this says, is that marketers are still uncertain about how to harness the power of mobile.
Perhaps the hardest part of the equation is that we’re asking “mobile” to mean so much. It’s a broad definition that has to encapsulate ads on smartphones, tablets, and apps. And we use each of these platforms in very different ways. Getting the experience right is often easier said than done. Not only is the conversion rate lower, but there are concerns that the smaller screen size on mobile devices make search and display ads seem more obtrusive and less appealing to consumers. As a result, publishers and advertisers can’t just shrink down their desktop web ads for mobile and call it a day; they need to rethink their strategies.
With this challenge lying ahead, I ask: Who do you think is using mobile well now? Who will be doing it well in the future?