Why Does Mobile Seem Immobile?
We have device growth and infrastructure, but where's the ad revenue?
Why has mobile yet to, well, mobilize? There are a number of reasonsâ€”a few of my favorites are:
â€¢ Economic Downturn: As mobile was ramping up, the economy slowed down. Advertising budgets, particularly test budgets for new media, became difficult to acquire.
â€¢ Growth of Social Media: The development of Facebook and Twitter stole some of the spotlight. Coupled with the tight economy, advertisers sought lower-cost â€˜social media,â€™ perceived to be viral and free in nature. Ironically, mobile has been silently driving much of the traffic behind social media, which was confirmed when Facebook released mobile figures in advance of their IPO.
â€¢ Lack of Consumer Data: Handset penetration, publisher audience figures, demographics, response rates, install ratesâ€”the list of complaints from advertisers seems endless.
Fortunately, the industry has made steady progress despite all of these obstacles. In fact, the marketplace for mobile ad inventory is as advanced as its cousin in the wired world. Mobile ad exchanges, Mobile DSPs and a host of buying models now offer advertisers unrealized opportunities while simultaneously providing publishers with the ability to monetize the mobile channel.
The Real Challenge
Premium mobile media CPMs may still be a challenge for most advertisers to swallow, as the industry has one final obstacle that stands before it: An understanding of how mobile relates directly or indirectly to overall media consumption.
â€˜The role of mobileâ€™ in the marketing mix has been a discussion topic Mindshare has been exploring for some time. Recently, it has picked up tremendous speed as we enter into 2013 planning season. Client inquiries suggest a positive outlook for the industry and growth looms on the horizon. To spur spending, many publishers have offered cross-media studies, to help advertisers understand the duplication and effects of advertising within mobile, digital, and print properties. Most of these publisher opportunities are passed over, but not without extreme gratitude for making an effort to solve the advertisers concerns.
The truth is the industry requires a solution that spans multiple publishers and multiple channels. The advertiser needs information that allows them to allocate budgets accordingly, allowing them to feel confident that their return on investment will be maximized toward the best performing media. (Remember, the economic downturn is no distant memory; savvy CMOs have learned to scrutinize every dollar spent in the new economy.)
A Solution Exists
The technology to solve our channel attribution concerns already exists. Google, Apple, and Microsoft have all hedged their bets by building multiple mechanisms that will enable cross-device targeting within their operating system ecosystems. Additional work is being completed by independent companies to provide a more holistic series of tracking mechanisms that will align a user profile across channels, publishers, and devices. The real obstacle is the potential for pending privacy legislation by Government agencies. Â
The result is the industry now coming to a near standstill while we wait for privacy definitions to be constructed and agreed upon. As consumers become more sophisticated in their understanding, and to some extent mistrust, of data collection via the Internet, nearly everyone from publishers to advertisers, OEMs to carriers, and developers to politicians have had to manage consumer privacy issues. All sides have the desire to reach the same goal. The NTIA has done a good job of engaging all the stakeholders in a very democratic discourse. Yet we may need to wait a little longer for â€˜the year of mobileâ€™ as election year politics are certain to keep this far from widespread public debate.
Mobile stands to benefit everyone and everythingâ€”advertisers, publishers, even other media channels. Privacy and tracking is now the single largest obstacle. We all need to participate in developing the regulatory policies to stop the standstill and move the industry forward.Â Â
-- Brian Stoller is Managing Partner, Leader of Digital Strategy for Mindshare, a GroupM Company. He leads the media agencyâ€™s emerging technology discipline and is a veteran of mobile marketing having previously been VP of Marketing for Third Screen Media.
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