Is The Mobile Ad Market Poised To Break Out... Or To Disappear?

from the are-mobile-ads-necessary? dept

Mon, Jul 7th 2008 12:39pm — Mike Masnick

Matt Marshall over at VentureBeat has an excellent article on AdMob, a top company in the mobile advertising space. Marshall does some back-of-the-envelope calculations to come up with some revenue figures and notes that AdMob is poised to start "minting" money as the mobile web takes off. It may happen, but I wonder if the mobile ad market will really be as big a deal as some make it out to be -- for a few reasons. First, it seems incredibly unlikely that mobile ads get anywhere near the clickthrough rate of web-based ads. Given the scenarios under which mobile content is usually called up (on the go, looking for something specific), it seems likely that mobile ads would get significantly less attention. Second, and more importantly, the concept of "the mobile web" still seems like a temporary invention that is destined to go away. As the iPhone has shown, it is possible to design a rather competent browser that can show "the full web" on a mobile phone. With mobile network speeds increasing, and more handsets bound to offer similar browsing functionality in the not-too-distant future, the distinction between the mobile web and the regular web seem destined to go away. At that point, specifically mobile ads will make even less sense, and the market will simply return to the existing market for web ads.

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Filed Under: advertising, mobile ads, mobile web
Companies: admob

12 Comments

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JB, 7 Jul 2008 @ 1:07pm

Mobile Ads 2.0
Successful ads will probably be brand-recognition banner ads, not click-through, similar to old-fashioned mobile ads 1.0 (billboards).

(Although billboards sometimes do prompt an immediate action, such as getting off at the next exit to go visit the world's largest ball of string.)
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- Anonymous Coward, 17 Oct 2012 @ 9:36pm
  
  Re: Mobile Ads 2.a
  Akn
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Anonymous Coward, 7 Jul 2008 @ 1:16pm

"As the iPhone has shown, it is possible to design a rather competent browser that can show "the full web" on a mobile phone."

Take RIM's mobile browser, please. It sucks, period! The idea that the web will continue to create two views of content, Mobile vs Standard, over the long term is absurd. The iPhone is the thin edge of the wedge that is breaking out full internet access on a mobile device as standard functionality. I can't wait to see what the competition does in response.
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Alex, 7 Jul 2008 @ 1:48pm

Not what we've seen
I work for a major web publisher who also has one of the leading mobile content sites. Our research has shown the opposite of what you state: click-through rates, as well as other important metrics such as ad and message awareness, are actually higher on mobile than on our site and vs. web industry standards.

The current line of thought is that this is because mobile ads are still new and somewhat of a novelty and that, in time, metrics will fall in line with where the web is now.

As to the "mobile web" vs. the standard web on a phone such as an iPhone, there will probably be a place for both. A mobile phone screen is not, and will never be, like a monitor. It is much smaller. Likewise for a mobile phone keyboard or pointing device.

Therefore, for some applications and content, there will be a need for content specifically designed with a mobile device in mind.
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- Mike (profile), 7 Jul 2008 @ 4:43pm
  
  Re: Not what we've seen
  I work for a major web publisher who also has one of the leading mobile content sites. Our research has shown the opposite of what you state: click-through rates, as well as other important metrics such as ad and message awareness, are actually higher on mobile than on our site and vs. web industry standards.
  
  That's surprising. On Techdirt, we serve up separate ads on the mobile version, and I can say that while we get decent mobile traffic, the ads get almost *no* clicks. Well below our web average.
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  - TO, 8 Jul 2008 @ 8:15am
    
    Re: Re: Not what we've seen
    I don't think anyone with knowledge of the mobile web would dispute that click rates on mobile sites are much, much higher than online sites get. If you don't believe me simply do a search on Google under "mobile click through rates".
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Brian, 7 Jul 2008 @ 1:53pm

Re: Now what we've seen
"The current line of thought is that this is because mobile ads are still new and somewhat of a novelty and that, in time, metrics will fall in line with where the web is now."

I agree, but I think a lot of clicks can be chalked up as purely accidental. The less intuitive user interface and methods for navigation on a phone can lead to a lot of miss-clicks.
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Rafael A. Junquera, 7 Jul 2008 @ 2:16pm

Embedded
I think the mobile web is more on the application side. Ads added to games, music, SMS. For web ads, I agree that it has to merge with current ads on websites.
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Mike B, 7 Jul 2008 @ 3:10pm

mobile web
I can never even get the "mobile web" to work right on my blackberry. Or on my old sprint phone for that matter. I never stop to think if I should be using .mobi or not, and whether the site has handlers in place to recognize my mobile browser. Frankly, the "mobile web" is full of suck.
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Venkat Ram, 7 Jul 2008 @ 6:20pm

mobile CPM
The click through rates for mobile ads are highly dependent on the type of campaigns. While some ad campaigns have been so successful (10% click through rates), others have not. So I am not surprised when someone says they haven't seen any clicks at all. I think once location services starts rolling then mobile advertisers can make use of the location of the user and serve more targeted ads. That is sort of what Google wants to do, Admob wants to do and even Nokia. Location based targeted advertising will be huge.
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scott, 7 Jul 2008 @ 9:01pm

In my opinion "the mobile web" is here to stay and will be driven by advertising for the foreseeable future. In many respects the mobile device is in the same boat as the large screen media device (aka TV).

The user experience for a mobile device will be different from the user experience for a desktop device if those experiences are optimized. I suspect that there will be more ways to optimize the user experience for interactive advertising on mobile devices than on desktop devices. After all, we take our mobile devices with us when we go shopping.

Content will also be optimized. I can see cheap reusable devices underwritten by sponsorships and location based subsidies. Free WiFi will expand. Android is free. Mobile hardware evolution will eventually slow down to a snail's pace and most mobile hardware will become commodities.

What is standing in the way of this?
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Rapole, 8 Jul 2008 @ 2:21pm

Mobile advertising viability
Mike seems to contradict himself in his opening sentences. I also work in the mobile space for a large publisher. The click through rates are 10x to 20x what is online currently. Yes, they will level out like online, but not to the lower levels predicted. As for the suggestion that many of the clicks are "accidental", we've got the back end metrics and user volunteered data to suggest differently.
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