The underwhelming performance of mobile advertising.
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Language matters and it reflects what we think we know. Some years ago a client, a wise, senior executive at a cpg company, explained to me that the first TV ad was produced by pointing a camera at a radio show. That’s what they knew, that was their frame of reference.
Over time, brand and direct marketers learned that combining moving pictures with audio could result in a unique set of characteristics and attributes for the purpose of commercial persuasion.
The early internet was characterized by ”brochureware,” an inelegant word meant to describe the transfer of content (and form) from a print brochure to a web site, again based on the current frame of reference. Early web advertising was not even that advanced with few standards or measures.
And now we talk about mobile advertising. Let’s review some numbers: mobile devices today are distributed at a scale representing two of every three people on earth. This includes approximately 290 million people in the US or a penetration of over 90%. This is just below the 292 million in the US who have access to a television, and above the 228 million who are online. Annual TV advertising expenditures are approximately $70 billion and $24 billion online.
But after a decade of trying, mobile advertising accounts for approximately $400 million, while celebratory pronouncements of its growth rate predict it will be $1.6 billion over the next four years. Why the celebration? More importantly, why the dismal performance?
The characteristics of commercially successful communications channels can be thought of as a combination of scale, precision, efficient utilization and effectiveness. Mobile has scale. And it is a uniquely individual device with the ability to be “precise” in its targeting. What it does not possess is an efficient “eco system” of standards, platform, proposals, purchasing, data, reporting and metrics. And therefore it cannot yet demonstrate its true effectiveness.
The mobile industry continues to be dominated by brilliant technologists who produce brilliant consumer devices and wage the fight for platform world domination. A business point of view, a more commercially viable “attitude” would see and embrace the opportunity to network the distribution, standardize the advertisER experience, and most importantly, make the consumer advertising experience relevant, seamless and measurably effective.
Mobile will win. User acceptance will insure that it will be a major advertising medium. The question is how many years, or decades more will be lost before the total commercial value proposition is understood and practiced by an industry, rather than by a collection of powerful individual players?