4 Comments

Summary:

To a lot of observers, mobile’s ascendence spells inevitable heartache. But Victor Malachard, of Adfonic, says it’s very early days, and, in fact, our best ones are still to come.

shutterstock_106932656
photo: Shutterstock/Nik Merkulov

There’s no disputing we’re hurtling towards a true multi-screen society, and mobile is invariably cited as a problem child in this channel family. The standard argument goes that advertisers won’t invest as heavily in mobile as they do online because mobile ads are simply not as effective. After all, people don’t see mobile ads, or click them accidentally, and just overall don’t work anyway, right?

Wrong. It’s time to be realistic about mobile advertising. The biggest companies in the world are in fact jostling for mobile leadership – and why wouldn’t they, as their audiences continue to shift in the millions to access content on mobile?

Still mobile is not simply an offshoot of online advertising where online ad experiences are simply shrunk for the smaller screen, nor is it an entirely new channel. It is still digital, but offers a new, ubiquitous way of consuming content on a smaller touchscreen device, that presents its own unique set of challenges and opportunities for advertisers. Here’s a look at the typical critiques of mobile, and what the reality is or will be.

They don’t pay enough

Let’s look at the first criticism: that mobile advertising is not lucrative enough when compared to online, because advertisers will not pay the same prices for mobile taps as they will for online clicks, nor will they allocate such sizeable portions of their budget to mobile.

This comparison between the large and small screen lacks fundamental logic. Online is roughly 10 years ahead of mobile in its evolution as an advertising channel and is now considered a tried and tested line item on advertisers’ marketing budgets. Naturally, where there is more maturity there is less risk, and where there is less risk, prices will be higher.

Online advertising was once equally nascent, with Google only able to command a few cents for its CPC-based search advertising model. As the market has matured, prices have risen drastically, and the same will happen with mobile. We are already seeing new, engaging mobile rich media ad formats commanding CPMs up to ten times the average for static mobile ad banners. This will only continue.

They fail to engage

Another choice hit is the fat finger theory: namely that the entirety of mobile hits are  really accidental. Admittedly there is some accidental clicking on mobile ads. But let’s also admit this happens with online too. More importantly though, if fat fingers really did account for most clicks, we would see pitiful post-click conversions and app downloads. Consider, then, that the mobile app ecosystem has been built on an ad-funded model. If mobile advertising didn’t work, we wouldn’t have witnessed the same explosion in the availability and popularity of apps.

And what about the effect of limited screen estate? It’s true that mobile devices are almost by definition smaller than other screens (although 10-inch tablets contend with laptops for screen resolution). But they more than make up for it with great interfaces that are custom-made for consumer interaction – far more so than a typical online ad. Touch them, pinch them, swipe or shake them, find out where you are with them: the most effective ads exploit this rich user interface to incorporate elements that people interact with, turning passive advertising into active engagement. In fact these rich media ad formats are capable of generating double the average clickthrough rates of static mobile ad banners.

Their metrics are inaccurate

Finally, it’s claimed that it’s impossible to target audiences with the same accuracy on mobile as online. Again, there is some truth here, in that third-party cookies, which underpin the success of online advertising, don’t work in the same way on mobile.

The mobile industry has worked hard at finding ways around this issue, and one solution that might unite advertising channels is Real-time Bidding, or RTB. In this model, buyers use big demographic and behavioral data to decide whether or not to bid for each ad impression based on previous behavior. The real beauty of RTB is that this data can be shared across any and all digital channels. So it will work as well on mobile as it does online, or indeed any other digital channel – for example, our app-enabled TV sets that will continue to become mainstream. (Note: my company, Adfonic, specializes in real-time bidding, as do many other companies such as Google’s Doubleclick AdEx, AppNexus exchange, 24/7 Real Media RTB For Publishers, among many others).

Mobile may be the best of the bunch

So far from being the problem child, as mobile continues to grow up, it just may well be the pride of the family. Because the one thing it really is better at than any other medium, is being ubiquitous. When people pop their phones in their pockets, they take your advertising with them. Everywhere. So if we need a way to join the dots of channels and screens then mobile, with its versatility and portability, plugged into big demographic data, really could be it.

Suddenly, instead of talking about channels, we’re talking funnels, in which the more we know about people, the more we as mobile advertisers can move from awareness and interest through to desire and action. And instead of devices we’re talking demographics, in which advertisers buy audiences.

Steve Jobs famously said: “You’ve got to start with the customer experience and work back toward the technology.” Mobile advertising, based on intuitive devices, moving with people, flexing and adapting to their behavior, will soon start with the customer experience. We just needed the technology to get there.

Victor Malachard is co-Founder and CEO of Adfonic, which operates a real-time bidding platform for mobile. Following him on Twitter @VictorMalachard.

You’re subscribed! If you like, you can update your settings

  1. Decent arguments made here until you get to the issue surrounding targeting. You over simplify the difficult task of marrying display cookie data to mobile devices, or even collecting and utilizing cookie data on mobile platforms all together. Mobile technology is fragmented and disparate especially in comparison to display; take mobile web vs. in-app technology, content consumption and data. Also, you make the point of saying that mobile is diffident from display when it comes to execution and user interaction. Agencies and advertisers are beginning to see this difference and this difference means that planning and strategies need to be different for mobile. An RTB does not address any of this and frankly does not do a good job of providing descriptive and predictive data modeling for mobile as there just isn’t any real scalable data for the mobile platform. Users clearly utilize and consume mobile very differently than traditional digital display, therefore it is sound to reason than new data and new measurement is required, which is not found cross channel and certainly not at an RTB, which btw is really used to drive efficiency not valuate data to justify any data premium.

  2. Adrian Martinez Monday, December 3, 2012

    Good point. It’s super early in the learning curve that is the new reality of Tablets.
    There used to be dozens and dozens of Auto Manufacturers , Train Co.s . Eventually the benefit oriented , higher quality platforms win out.

  3. Adrian Martinez Monday, December 3, 2012

    Mary Meeker’s breakdown is the benchmark to see the sheer volume of this medium, smartphones/ tablets . Facebook is still in it’s infancy as well.

  4. Crane Rental company MS Monday, December 3, 2012

    This industry is still in it’s infancy. We haven’t even converged on a common type of screen. We’re acting like it’s those ads that popped up in Total Recall for Arnold as he walks around. Just look at the gaming industry and how it’s affected by the mobile gaming market. things aren’t just changing they are hyper evolving. which really aggravated me to see Apple sue Samsung for that crap. The only thing that’s going to happen is the cost is going to be transferred to the consumer, and then it will slow the progression of tech adaptation to our lives. Customers lose.

Comments have been disabled for this post