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Summary:

Although mobile apps have become increasingly mainstream, no one has figured out how to successfully monetize them yet. What’s the problem here? Inneractive’s Hillel Fuld says mobile technology has evolved faster than the Web, and it’s time for advertisers to match mobile’s pace.

digital money_FamZoo

Based on its traction in the mobile development world, in-app advertising is the best option we have. But if that is the case, why hasn’t it taken off yet? Analysts have said that mobile advertising is a $20 billion opportunity this year in the U.S. alone, but according to even the most optimistic reports, global mobile ad spend in 2012 didn’t even reach $7 billion. Some claim that mobile advertising will never meet these expectations because of its very nature, but I think there is another problem here.

Advertisers in the mobile space need to catch up with advances in mobile technology. Let me explain. If you have played your share of Angry Birds (either on Android or the ad-supported version on iOS), you were surely disappointed and confused when old-fashioned and unattractive display banners appeared right in the middle of such a well-designed and thought-out game. In the mobile context, display text-based banners just don’t cut it anymore.

From what I’ve seen during my time working at inneractive, a company that specializes in mobile app monetization, the discrepancy between the predictions of mobile advertising and the facts on the ground can actually be explained quite simply.

You see, the Web, generally speaking, has not fundamentally changed since its birth. True, it has evolved to a more visual platform that is less text-based, and user-generated content has become increasingly dominant. But in terms of ads, what worked early on still seems to be somewhat effective.

In the mobile world, developers need rich media advertising, and the advertisements need to be aligned with the type of apps people are using. This includes HTML5 ads and even full video advertising within apps. The point is, ads need to be just as engaging as the apps in which they appear. Developers can no longer serve some generic ad and expect to get the engagement they need to monetize an app.

And hyper-local mobile advertising is no longer a luxury, it is a necessity. Displaying an ad to a user in their local language about a venue they are passing by at that very moment will generate more engagement than a traditional display ad can ever dream of.

The problem is that rich media, hyper-local and other “newer” forms of mobile advertising are still not used by most app monetization solutions. As soon as that changes and the monetization space catches up with the smartphone and all its embedded technologies, we will see all the analyst predictions come to fruition. That is the day on which mobile advertising and app monetization in general, will explode.

Won’t be long now…

Hillel Fuld is a tech blogger and marketing expert. Fuld is also a senior evangelist at inneractive, a company that specializes in monetizing mobile apps. He blogs at Tech N’ Marketing and you can follow him on Twitter at @HilzFuld.

Image courtesy of Flickr user FamZoo.

We’ll be talking more about mobile monetization strategies at GigaOM’s Mobilize conference on Sept. 20-21.

  1. For one thing, advertisers AS WELL AS developers need to make smarter selections of the ad networks they select and pour their efforts into. Although I have seen a good return with LeadBolt in the past, Airpush’s new SDK just about blows anything else I’ve seen out of the water. Click through rates for advertisers are around 16% through Airpush’s smartwall. And devs are gettin CPMs averaging $9.55. For those who us who used to toil for pennies in the past, fusing our creativity with the technologies and advanced advertising capabilities made available to us by Airpush, there’s no reason to not make a killing at this today.

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  2. guess it would have helped to provide a link :) check out the Airpush sdk here – http://bit.ly/NyV3FJ

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  3. Mobile App Wizard Thursday, September 20, 2012

    Great post !! I totally agree with E!Man views.

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  4. thanks for sharing excellent information…i really enjoyed while reading your blog.

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