When ads know where you are and what you're listening to
Mobile advertising might only be in the early stages, but it presents new opportunities for targeted and interactive ads, said panelists at this week's paidContent Mobile: Leveraging the Smartphone Boom event in New York. Mike Steib, Google's director of emerging platforms, predicted “a good ad-supported mobile application will make more money this year than a TV station or newspaper," in terms of top-line revenue.
Though it might still be early, “it's a really good business,” he added.
What works? Steib said display units are effective, especially “advertisements that take advantage of the unique capabilities of the mobile device,” such as Google's click-to-call ads. He claimed product brands can see five or six times the return on investment from a click-to-call ad.
Rachel Pasqua, director of the mobile group at digital marketing firm iCrossing, agreed that click-to-call ads have been successful for clients. She also sees a lot of promise in Apple's iAd mobile advertising system, which is like an “app within an ad,” she said. iAd is a potential solution to “banner blindness,” she said, and is “taking the whole model of display to the next level.”
Pasqua said she is “excited about ads that have the ability to target who I am and what I want.” The challenges are still the lack of uniform tracking and targeting in the mobile space, which she predicts will lessen in a year or two.
Internet radio station/application Pandora can target users based on musical preference, said John Trimble, chief revenue officer at Pandora Media. For instance, if you listen to classical music, Pandora could deduce you are a certain demographic and target accordingly.
Size doesn't matter when it comes to mobile advertising ― but relevance does, said Eric Johnson, ESPN's executive vice president of multimedia sales. World Cup advertisers that “tailored their ads to be very football-forward had a lot better response than those who didn't,” he said.
Johnson said consumption on mobile devices is driving ESPN's mobile content and revenue. For instance, on College Football Saturday, ESPN sees more traffic in the scoreboard section on mobile devices than it they do on the website.
ESPN also had much-publicized success with its mobile coverage of the World Cup. The World Cup app was downloaded 2.5 million times and “more importantly had over a million people on average using it every single day,” Johnson said.
Mobile ad opportunities to watch
Trimble said Pandora has had great success from audio ads “in every metric,” though he didn't offer specifics. “Audio advertising in the future is going to be a big opportunity to convey a really effective message,” he said.
Location is the big differentiator for mobile over desktop ads, Steib said. If someone puts in a search and the ad comes up for something nearby, Google has found the response to that ad is “astronomically higher than it would be if the result wasn't within a thousand feet of that person."
“We're just seeing the beginning of markers taking advantage of location,” he said.
On a later panel, Foursquare and The New York Times discussed opportunities for targeted, location-based advertising.
Steib said mobile ads will continue to evolve similar to desktop, with more high-priced, “top-of-the-page”-type ads and more reasonably priced, targeted ads filling in the rest of the space. “You're going to see lots of solutions on the marketplace,” he said.
While he admitted Apple's iAd is a good start, he emphasized it shouldn't be the only one. “I'm very much a fan of the implementation, as long as its part of a menu of choices,” he said
Steib doesn't think apps are the future anyway; he said they are a “bridge technology,” eventually leading everyone from apps back to the Web. While he admitted his view might be controversial, the importance of the mobile Web came up several other times throughout the day.