Why No One Likes Mobile Ads and How Companies Hope to Change That


No one really knows if ads on smartphones work.

U.S. adults now spend about 82 minutes a day on average using mobile devices for activities other than calls. Yet only about 2 percent of all advertising dollars is being spent on mobile websites or inside mobile apps, according to estimates from eMarketer, an advertising research company.

The problem, advertisers say, is that technologies for tracking users and measuring the impact of ads haven’t kept up with the fast switch by consumers  to smartphones and tablets, leaving marketers unsure if the ads are working and unwilling to commit large budgets.

One result is that advertisers are paying much less for mobile ads. The average cost an advertiser pays to show an ad to a thousand people on a desktop computer is $3.50, but it’s only 75 cents on mobile devices, according to estimates from the venture capital firm Kleiner, Perkins, Caufield, and Byers. Google, which dominates the $70-billion-a-year business of digital ads, said in January that its average revenue from each ad click dipped 6 percent in 2012, a drop it attributes partly to users shifting to mobile devices.

The most significant issue for ad buyers is that they don’t know if the ads are working, like they do on desktop computers. The Interactive Advertising Bureau, an online ad industry group, admitted as much in a 2011 report. It said “all media depend critically upon reliable metrics for audience reach,” adding that mobile ads were “challenged by serious methodological and technological limitations.”

What works on conventional computers doesn’t on mobile devices, and in many cases replacements have not yet been developed. The standard method of tagging, tracking, and targeting online ads is the cookie, a small text file that websites store on a given computer’s Web browser that identifies it. But cookies don’t work as reliably or powerfully on the Web browsers of mobile devices, and there’s no such thing as a cookie inside a mobile app, where much of people’s time is spent and advertisers would like to follow.

Another particularly vexing problem for advertisers is the way consumers frequently switch back and forth between their mobile devices and a PC when performing a task. For example, a person may see and click on a mobile ad, but actually purchase the product on their PC. That means advertisers can’t tell if their ad worked.

“Our ability to measure behavior on mobile is very challenged,” says John Montgomery, chief operating officer for interactive advertising in North America at GroupM, the world’s largest ad agency by billings. “It’s very difficult to connect the mobile impression to an action or sale.”

Continue reading on www.technologyreview.com



Categories: Digital Advertising, Mobile

Tags: ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Gigaom

Technology news, trends and analysis covering mobile, big data, cloud, science, energy and media

The healthy rawr chic

You must be willing and determined to achieve a state of mind, body, and soul beyond what this world imagines could be possible. —Mayra Mejia BA MS

Brand Leadership Blog

The leading forum worldwide for executives and researchers addressing the challenges of building and sustaining great brands

INSIDEDIGITAL

Intelligence for Brand Marketers

Digital Buzz Blog

INTELLIGENCE FOR BRAND MARKETERS

ciaobasta

Startups, entrepreneurs, ideas. Let's make it informal

Brian Solis

INTELLIGENCE FOR BRAND MARKETERS

HubSpot Marketing Blog

INTELLIGENCE FOR BRAND MARKETERS

ReadWrite

INTELLIGENCE FOR BRAND MARKETERS

Marketing Pilgrim - Internet News and Opinion

INTELLIGENCE FOR BRAND MARKETERS

advergirl

INTELLIGENCE FOR BRAND MARKETERS

Posts from the Econsultancy blog

INTELLIGENCE FOR BRAND MARKETERS

Get Elastic Ecommerce Blog

INTELLIGENCE FOR BRAND MARKETERS

%d bloggers like this: