What’s the Future of Mobile Advertising? Good…Just Not Now.

Mobile advertising has been drawing a lot of attention lately, being heralded as the next biggest platform for ad-sellers. In fact, mobile advertising spending has skyrocketed to $1.2 billion from the $636 million in 2011- a 95% increase. Despite all its attention, mobile advertising is still a struggling platform. In 2011 mobile advertising generated $1.6 billion globally, which is a small number compared to the $498 billion generated in the global market. On top of that, Apple had dropped its buy-in price for iAds from $500,000 to $100,000, and increased publisher revenue share from 60% to 70% in a bid to increase interest. Investors interested in the mobile market are getting antsy; while Facebook claimed that it made $500,000 off of mobile advertising a day back in July, that blurb didn’t stop its stock from pummeling to a low $24. So, what’s the big deal?

While it seems like mobile advertising isn’t living up to the hype, it’s important to note that the platform is relatively new; it’s the baby of the global marketing world, and it’s still projected to become a titan in the next few years. The researchers at eMarketer predict that the U.S mobile advertising market alone will generate $12 billion. So what’s the problem right now? Because this is a new, completely different; ad-sellers are using the same old tactics and methods and applying them to a new medium, and they aren’t as effective. On top of that, mobile advertising lacks the basic infrastructure of its global market brethren. As pointed out by Frank Barbieri, a writer for TechCrunch,

Mobile advertising has become the Baby Huey of the media world: it’s huge and lumbering, but not mature. Analytics, measurement and targeting have not caught up to where online is, exactly when we’re hearing inventory volume is set to surpass online. Neither Comscore nor Nielsen rank the top mobile apps like they rank the top online properties by category and unique users. Nor do they rank ad networks. Phone and operating system manufacturers as well as the carriers have created fragmented and feature poor cookie environments on phones. What is seen as standard operating procedure online, the use of cookies to target users and understand usage,is treated as heresy in mobile.

This lack of basic advertising infrastructure means it’s hard to manage and measure brand campaigns.

However, as the world moves closer to the usage and dependence on smartphones and the mobile platform in general, mobile advertising is going expand and develop the infrastructure it’s currently missing because it won’t have a choice. Social media websites like Twitter and Facebook are already beginning to post impressive sales figures ($129 million to $72 million, respectively), and it’s expected to rise exponentially by 2014. Until then, mobile advertising will be an incredibly bumpy ride for ad-sellers. The future of mobile advertising will be great, but its present will have a bit of a lag start.

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