Fall'12 Breakthrough

October 14-17, 2012 | Austin, Texas

5 barriers to mobile ad success

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Big obstacles are cutting off the path to effective mobile campaigns. Read on for a quick-fix guide to these vexing problems.

To date, mobile advertising has struggled to achieve the success expected by the industry. But let's give marketers a break. Mobile advertising is still in its infancy, and we have a lot to learn. Instead of only focusing on the negatives, let's address how we can overcome these obstacles to create successful mobile advertising at scale. It should be common sense that every time there is a new medium, there needs to be a change in the way we approach the new medium -- and mobile advertising is no different.

5 barriers to mobile ad success
 
Below are five of the main barriers to success facing ad publishers and marketers. If all parties can play their part, many of the challenges affiliated with mobile advertising can be overcome to benefit everyone.

Internet giants have been unable to put a value on their inventory

Most large publishers, including Facebook, Amazon, and Google, don't really understand their mobile audience. Mobile is anonymous, and they do not have the in-depth knowledge of their mobile users like they do with other channels. This precludes them from providing desirable segments of mobile inventory. It is also very difficult to map all of the online audience data that companies have collected over the years to mobile users -- again limiting the value of their mobile audiences for sophisticated marketing efforts.

The fix: If these publishers can start to define their users with meaningful segmentation, then they can offer marketers valuable inventory. These segments should be similar to what marketers use in the online world, such as demographics and behavior, while taking advantage of the unique elements of mobile, like location. If these leaders are able to offer better inventory to marketers, consumer will benefit from more relevant ads.

Basing ads on location alone

Simply basing ads on where consumers are located in real-time does not mean an ad will be desirable and could lead to poor performance. Just because you are walking by a bookstore doesn't mean that you love to read.

The fix: Marketers should stop using location data alone and combine location data with behavioral targeting to match consumers to the most relevant ads. Understanding consumer behavior, lifestyle, and intent will increase ad click-through rates and secondary actions.

Also, incorporating predictive analytics into location targeting allows marketers to reach their audience even when they are not near the desired location. For example, predictive targeting can identify people who live or work near a specific Target store and then deliver ads and offers that are most relevant to them, even if they are not near the store at the time of the ad impression. This allows for mobile ads to be sent at more appropriate times within a consumer's purchase cycle -- not expecting an instant, unrealistic, action due to a real-time, location-based ad. 

Privacy concerns

There is a growing amount of governmental and consumer scrutiny of mobile-data privacy. Publishers and marketers are still learning how to use mobile data in privacy-safe ways as the industry evolves. One of the reasons mobile advertising lacks the flexibility and power of online is the need for anonymity and complexity of conforming to good privacy practices. From the consumers' perspective, they want control of their data and have a right to privacy. This may slow down their engagement if ads (and the mobile applications that serve them) are perceived as questionable.

The fix: Mobile targeting can be privacy-safe by design. It is possible to extract useful data points while keeping users anonymous. Practices such as discarding raw data, not collecting personally identifiable data (i.e., name, address, social security number or financial data), collecting data only from users who opt-in while offering clear opt-out options, and ensuring secure data transfer are some examples.

Mobile is not the platform for brand advertising

Mobile advertising has small real estate and very different consumer context compared to other channels. While top-of-the-funnel advertising can certainly be deployed with creative executions and integration to deeper brand experiences, the potential of mobile ads lie in linking to purchase conversion. According to IAB Mobile Research, July 2012, "Smartphone users consider that device to be mission-critical for their day-to-day lives, with 70 percent saying that they 'never leave home without it.'" Many big brand budgets are not focusing on this stage of marketing.

The fix: Mobile ads should have a specific call-to-action -- a discount, a deal -- that is relevant to a consumer's daily life and contextually valuable. This makes mobile ads best suited for businesses that are within consumers' habitual travel patterns -- including both local businesses and national retail chains with local stores. Save the brand-building campaigns for other executions and focus on offers that mobile users want during their daily and weekly routines.

Integration of payments

A mobile device is different than a PC. Consumers need to be able to view, click, and purchase through an ad within a few simple steps. Mobile users do not have the patience (or sometimes the dexterity!) to input credit card information on their device.

The fix: The integration of technology needed to make mobile commerce as easy and trusted as online commerce is still in the making. Several companies such as PayPal, Google, and Apple are putting the pieces together. As this technology becomes more accessible and accepted, expect purchasing through mobile ads to speed up dramatically.

Mobile can and will be a game changer for advertising. It is the perfect medium for offers from brands and businesses with a local presence, and, once the kinks are worked out, many successful campaigns will hit their mark.

David Petersen is the CEO of Sense Networks.

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