Earlier this week I came across an article from Jean-Louis Gassée titled, “Mobile Advertising: The $20B Opportunity Mirage”. In it, Gassée argues that while the projections for mobile advertising revenue continue to skyrocket, there is no evidence that those lofty expectations will ever really come to fruition. He even goes as far as claiming:
“If the industry hasn’t cracked the mobile advertising code after five years of energetic and skillful work it’s because there is no code to crack.”
As much as I would love to claim that Gassée is flat out full of hot air (apologies for the pun) I must admit he raises some valid points. In 2011 mobile advertising was roughly a $1 billion business, compared to the $32 billion market for all around internet ads. Technologies such as television and the original web were able to generate much greater percentages of ad revenue in their first five years than mobile has, so it is easy to see where Gassée is coming from. What is also easy to forget that sometimes it takes even the greatest technological and creative minds a little longer than expected to figure out how to take advantage of a new innovation’s potential.
Something we try to hammer home all the time is that mobile advertising is only effective when it is done in creative or interesting ways. Placing staid banner ads in mobile apps will do little more than annoy users and cause them to close out your ad before it ever gets read. Bringing in some elements of interactive content will be far more effective, and slowly but surely we are seeing this take place. Take for example the folks at Toyota, who created a simple puzzle game that launched users to a landing page for the new Rav 4, which promoted the car’s ability to “save some time.”
Mobile advertisers also have a nasty habit of thinking their job is done as soon as the ad is made. Time and time again we are seeing mobile ads that launch into desktop websites, giving users a poor experience on their mobile devices. Companies like Boar’s Head have felt the sting of underestimating mobile optimization, and are now finally beginning to figure out the formula for success.
When it comes down to it, the solution to the mobile monetization struggle may simply be finding the right avenue to direct mobile ad spend. Currently, 62% of mobile ad revenue is coming from mobile searches versus only 28% from display ads. What this means is that advertisers need to take advantage of the fact that mobile users are more likely to access ads while browsing than they are while they are already engaged. Naturally, this lends to the explanation of why Facebook continues to struggle with mobile monetization, and the folks over at Twitter are reporting success in the medium.
To me, this is a perfect example of a technology that outpaces the people who will use it. We see another example of this everyday with our QR code generator, as the potential of the QR code to connect out-of-home advertising to the mobile web is enormous but it has been very slow to be adopted. I could go on and on with this list, from the likes of the laser disk, to the now famous story of Wendell Weeks, who’s company, Corning Glass, developed an ionized substance dubbed “Gorilla Glass” in the 1960s that never seemed to find a market until some guy named Steve Jobs decided it would be the perfect fit for the touchscreens he wanted to include in the first iPhone.
So for now, mobile advertising may be something of a mirage indeed, but in time, as creative marketers begin to take hold of right reigns, I’d wager the mobile market will reach its potential sooner than we think.