Why mobile advertising should finally soar in the next year. No, really!

It was probably inevitable. Mobile marketing and advertising have largely failed to live up to tremendous hype for the better part of a decade, so it shouldn’t be surprising that we’ve seen a recent backlash decrying how mobile ads stink, are ineffective and command paltry rates compared to traditional online ads. It doesn’t help, of course, that mobile ads seem to grow more annoying as our use of smartphones increases.

And there are plenty of other reasons the mobile ad market continues to struggle. Deploying quality ad campaigns across the massive range of mobile devices is time-consuming and costly. The rush to build mobile apps and websites has created a glut of inventory on which to place ads, shackling ad rates. And marketing types have largely failed to understand how smartphones and tablets are very different platforms than PCs, relying all too often on banners that take up far too much of the small screen and are often untargeted.

Faster networks, better hardware, and new technologies and tools

But while I’ve long been skeptical of sky-high mobile advertising forecasts, there are plenty of reasons to believe the industry could take some very big steps in the next year or so. Just as tablets are giving the overall mobile ad market a boost, the growing popularity of smartphones with oversized screens is giving advertisers more real estate on which to deliver their pitches while minimizing the annoyance factor. The continued build-out of LTE networks and increasing use of Wi-Fi are providing faster connections, enabling advertisers to create immersive, rich media campaigns that can be viewed immediately. (It is true, however, that Wi-Fi connections minimize advertisers’ ability to deliver targeted ads.) And advancements in analytics and application management software will provide more information regarding the performance of mobile apps and the advertisements they deliver, enabling marketers to create more effective ad campaigns.

Meanwhile, marketers should be salivating over some new technologies that are just beginning to gain traction among early adopters. As we’ve written before, NFC should give mobile marketing a huge push by enabling consumers to receive promotional content and product information with just a click, and by directing users to mobile websites more quickly and easily than QR Codes can. Augmented reality will increasingly be used to bridge the gap between the virtual and the physical worlds, providing huge opportunities for advertisers to interact with their customers. Pinpointing technologies will continue to improve, enabling marketers to reach consumers when and where they’re most likely to be receptive to a mobile ad – including indoors and in the urban canyons where accurate location can be difficult to determine. And “closing the loop” with mobile payments will provide the ultimate conversion metric, enabling advertisers to determine the ROI of highly targeted campaigns with amazing accuracy.

Innovation and user permission are still paramount

As powerful as some of these new tools are, however, they’re useless unless advertisers can come up with innovative campaigns that consumers actually are receptive to – and that aren’t forced upon them. Starbucks, for instance, seems to have seen some success with Cup Magic, an augmented reality-based app that allows users to scan holiday-themed cups and send a multimedia message and even a gift card from their phones. Adidas recently combined location with mobile video in its Light You Up campaign, which drew thousands of attendees to a promotional event in New York. And Kraft last year saw impressive results from an NFC-based pilot campaign at San Francisco-area grocery stores that allowed users to download an app, access recipes and share their experiences via social media.

Those efforts demonstrate the importance of giving consumers something of value in exchange for interacting with the brand. They give users control, allowing them to initiate the conversation and interact exactly as much as they want to. They leverage compelling new technologies that allow businesses to connect with users in ways they never could have before. If others take those lessons to heart, this might be the year mobile advertising broke through in a big way. Finally.

Relevant Analyst
Colin Gibbs

Colin Gibbs

Mobile Curator Gigaom Network

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1 Comment Subscribers to comment

  1. The mobile advertising budgets in Turkey increased around 87% and the CTR statistics did not decrease in the same period. This would mean something positive I guess :)

    However the problem is that the current budgets for mobile campaigns are so low, even a %300 increase won’t satisfy the market. In that case as long as we don’t invent an evolutionary method for mobile ad campaigns, the market will continue to walk on edges.

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