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One thing that’s clear from today’s “Future of Mobile Advertising” breakfast club meeting from Strategy Eye is that the year of the mobile has not yet arrived. Until mobile becomes an integral part of every brief given to agencies then it cannot be fully regarded as having arrived. For now it remains non-essential. But the growth stats suggest this will change. Screen shot 2013-03-13 at 16.24.40                             Source: MagnaGlobal, eMarketer As digital brought lower yields than print, so mobile promises lower revenue than digital. Ad rates for mobile are $1.31 (CPM in the US) compared with £4.70 for Desktop, $15.00 for magazines and $51.00 for newspapers. Mobile is affected by oversupply of opportunities forcing down the price but there are other key factors holding back mobile advertising. One of the biggest problems hindering clients and agencies, according to Millenial Media and AdMaxim, is the inability to track advertising success. Cookie proxies mean one cannot comprehensively track users and their activity. Companies such as Adex aim to provide solutions using “persistent identifiers” – in order to build profiles of users who can then be targeted – but the expectation of regulation to restrict such practices sounds high. One only needs to see the sensitivity of users of Facebook and Google’s tracking and storing of personal information and location to understand this. Furthermore, the fragmentation of platforms such as video, rich media and banner advertising means that data on user activity is not stored in the same location, again making joined-up targeting more difficult. Banner advertising seems (i) intrusive to users (ii) takes up too much space on a small, mobile screen, and (iii) doesn’t do justice to the technology. More progressive solutions seem to exist through apps or content with which users are already interacting. See Proctor & Gamble’s Charmin toilet paper promotion with its “SitOrSquat” public rest room finder app, or kiip’s “real rewards for virtual achievements” which rewards gamers and app users with promotions from brands for successful achievements whether it be a bottle of Gatorade for achieving a PB recorded through a fitness app, or a free McDonald’s meal for defeating an end-of-level baddie. The FT adds: “Many are completely ditching standard advertising. Other publishers are charging for content. BuzzFeed, the popular entertainment and news site, which generates about 40 per cent of traffic from mobile, sells marketers the opportunity to sponsor branded stories. The promotions, which have a similar sensibility to the stories on the site, appear regardless of whether people are visiting the site from a computer or a mobile phone. Motorola, for instance, recently sponsored a post titled “The 10 Worst Times For Your Phone To Die On You”. The list ranged from when a person is locked out of the house to when a blind date isn’t going well. At the bottom of the list was a picture of its new phone, highlighting its 32-hour battery life.” So who’s winning currently? Google takes 57% of all mobile ad revenue with Facebook second at 8.8%. But Google cannot charge as much for its mobile ads as its desktop, demonstrated by the firm’s falling cost-per-click rate, down for five consecutive quarters in a row as of Q1 this year. Progression of new start ups entering the market is limited with VC funding showing a steady increase but being largely dependent upon existing firms snapping one another, plus one-off spikes. The role of mobile operators could be reinvigorated as traditional Ad Networks are interested in speaking with them again. Where users have their location settings switched off on their phones, only the operators can supply invaluable information about users. Data would need to be anonymous, and even then some might question how that information can legally be used, but there’s potential for operators to improve their status within the discussion. To conclude, mobile is not there yet. But with 80% of tweets, 65% Facebook postings and massive increasing growth of search coming from mobile, it’s one to watch closely.

Post Author: Ewan McKay

Ewan runs a recruitment business specialising in sales jobs and marketing jobs for media companies.

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