Mobile advertising – turning the dream into a reality.

Since about 2005, every year has been the year when mobile advertising was going to explode.

In 2013 it’s expected Mobile Ad revenue will top $11.4bn after growing 20% in the last year, so it’s pretty safe to say we now live in a world where Mobile advertising has arrived and predictions now show over the next 5 years mobile ad revenue will rise faster than any other media.

While this sounds hugely impressive, by two key measurements Mobile advertising is failing to live up to expectations.

1) The revenues are not keeping pace with the time spent on the media, we now spend 4.5% percent of our time on mobile, but yet only 1.7% of ad spend is on the channel, and this gap is rising as smartphones become ever more popular and ever more used.

2) The value of mobile ads are still low, a typical CPM of $1.31, about 1/3rd of other digital ads and around 1/20th of TV.

What’s more the ability to monetize mobile traffic has never been greater, it’s the largest challenge facing some of the most important companies of our time, be it Facebook, Twitter or any content provider without a paywall.

But what most disappoints me is the very unambitious and extremely uncreative way that people have looked at mobile as advertising platform, it reminds me of how most digital ads have completely failed to make the most of the unique opportunities the channel has to connect with people in incredible ways.

Allow me to follow a brief journey through the history of digital advertising:

Digital ads first appeared around 1994 with the world’s first pop up ad and some banner ads. While this may have been an entirely new media channel, the thinking was basically taking existing print ads like loose leaf ads and newspaper ads, and simply finding digital equivalents.

Around ten years later with much faster internet access speeds allowed video to be streamed and as a result people took 30 second TV ads, chopped them down to 15 seconds and the world of pre-roll ads was born.

It strikes me that this timeline shows how incredibly poor innovation in the space has been, while we may see page dominant ads, or expandable banners, or MPU units, basically the entire world of digital advertising, a new paradigm of targeting, connectivity, measurement, real time, personalized content, and what we got was traditional ads repurposed.

Mobile seems no different.
Whether it was using SMS as a way to clumsily impart basic information or the decision that the mobile internet should be turned into screen real estate in exactly the same way that we approached physical newspapers, the quality , functionality and ambition has remained low.

What I don’t get has been the way that we’ve approached both digital and especially mobile as a screen. Just simply space to take up and put in front of eyeballs.
mobile ads
Our mobiles are far more than screens, they are our diary’s, our address books, our things to do lists, our maps, our photo albums, our location beacons, our coupon collectors and more, in many peoples cases they are their wallets.

The opportunities for mobile marketing are incredible, but it won’t come from thinking of the mobile as a small screen we take everywhere, but as a device that can remind us to do things, tell us where things are, keep our shopping lists, and so on.

And as our phones start to understand more about how we behave and where we are, the opportunities for mobiles to start predicting our behavior and make suggestions to us at the right time and the right place, will soon make advertising as a service the true moment where Mobile advertising really has arrived.

More on predictive computing and the true value of mobile advertising later.