Why mobile advertising is benefiting from innovation

Published by Ewan Spence at 20:32 UTC, August 2nd 2010

What’s the most used internet application on your Symbian phone? It’s likely that the web browser is going to feature quite highly if we were to have a survey, and the huge number of eyes that mobile websites can gather is only going to grow in the future. That makes it one of the growth areas for online advertisers, and the capabilities of Symbian-powered smartphones should help drive innovation and help grow the market for everyone involved. My thoughts below....

The hardware in Symbian-powered devices (and in similar devices using Android or iOS), alongside the fact that these are personal and mobile devices,  is waiting to be fully harnessed. And have no doubt that they will be harnessed, there are too many interested parties involved in the mobile advertising space for this to be left to “smaller versions of adverts on the ‘full’ websites”.

The explosion of low and mid-range phones coming over the next year are going to establish the handset and the mobile browser as a valid platform to address – expect Android to reach out to these markets as well. The common denominator? The web browser, which also has the advantage of being available on feature phones as well. People moving between handsets still visit websites (and in the case of browsers such as Opera Mini, it’s one quick sync and all your bookmarks are copied over). For all the talk of in-app advertising as a monetisation strategy, the real money is still going to be in content publishing over the web.

The big name in this game is of course AdSense, from Google. They are continuing to increase the options and capability of their mobile advertising and last week announced that "location extension for display” was being made available for search ads on Android and iOS4 browsers. You have to assume that this is a small trial and they’ll be targeting a much broader base of devices as soon as possible.

Innovation in the space is vital for any company, but especially Google. For all the cool services, products (and mobile operating systems) that they have under their wing, the vast majority of their profit is derived from serving adverts alongside searches and on other websites using AdSense. To continue to grow, they need more profit on a significant scale, and right now that means growing ad revenue.

But unlike the first days of AdSense, Google don’t have the mobile market to themselves – there are a number of competitors that can deliver mobile adverts to the web browsers in your smartphone. For the advertising industry as a whole that’s a good thing.

With a crowded playing field, value for money is going to be at the forefront of people’s decision with which networks to use – both the people who buy advertising and also those that create content and monetise it with adverts around the content (just like we do here on All About Symbian). The race is on to create adverts that converts views to clicks, and clicks to successful transactions. And that means that the R&D departments are going to be working with all the information that smartphone sensors can provide.

Working out how to address the mid and low end devices is key to accelerating the impact of mobile advertising for all the advertising networks, not just Google. The methods used for ‘full’ websites do work on mobile, but the expectation is that the unique properties of mobile are not being fully exploited… yet. That’s why the march of Symbian into the low end of the market, through Nokia devices like the 5230, is so important.

MObile Ads

Why through the browser? Because no advertiser should be relying on advertising on a single mobile platform, even one with the proliferation of Symbian into tens of millions of new handset sales each month. By this time next year, the number of Symbian powered ‘low end phones’ will be measured in the hundreds of millions, and the trend will be up and up. Given this, you can expect to see more experimentation and innovation in mobile advertising.

What innovations could we see? Location is the easiest area to start with (as it has a clear benefit to the advertiser, compared to a deskbound computer). Expect more advertising to become location aware. And that means making the mobile browser location aware as well. It’s already happening for the user as a by-product of services like Latitude and Foursquare. With that data available, it should be relatively easy for the location aware browser to use this to help source relevant advertising.

Relevancy could be improved – the smartphone is much more personal than the desktop and my gut feeling is that sites visited will be a better representation of someone’s tastes. The catch will be to use the information held about browsing habits in a phone that doesn’t break any privacy or data collection regulation.

At the same time a better understanding of mobile issues needs to be shown by the advertisers – more than one advert per mobile web page and your site will start to look cluttered, while the loss of unlimited data plans will make people conscious of how much data their phone is using. That’s going to make advertising look like something that is costing the user money, which is not a good situation to be in.

I’m confident that these issues will all be addressed by the R&D departments (and they may have some pilot studies already running quietly), and we’ll see some new methods of running display adverts in the mobile browser by the end of the year.

What I’m also confident in is that with so many smart people and start-ups looking to make their mark in the online advertising space, this competition in the ecosystem will accelerate the development of any solutions at a far faster rate that when Oingo (which became AdSense) was started in 1998.

What will be the "486x60 banner advert" of the mobile world? I’m not sure, but with the explosive growth in smartphones it shouldn’t be that long before we find out.

-- Ewan Spence, August 2010.

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