• by Eric Holmen , May 15, 2009

As the scope of mobile communications continues to expand, advertisers, marketers, publishers and content providers are working overtime to optimize this medium's revenue potential. At the same time, much attention is being paid to the phenomenon of mobile advertising networks -- some say they are too incremental or pervasive, yet they are crucial to the continued growth of the mobile economy, and are contingent to the sustainability of the existing mobile revenue structure.

These networks function as a critical intermediary between businesses looking to reach consumers and publishers seeking revenues for their mobile content. They provide a means for advertisers to enter the mobile space without dedicating substantial resources to developing contact lists, messaging, and outreach tactics. The networks are vital in assisting publishers in placing their content inventory and can provide a visible platform for smaller and newer content providers.

Advertisers

Perhaps the most important reason mobile networks are gaining importance so rapidly is the way in which they reduce the barriers to entry into the mobile advertising market for companies new to the channel. Networks, particularly those with comprehensive distribution models, marketing capabilities and cross-channel partnerships, offer advertisers a 'one-stop' shop for mobile advertising solutions, reducing or eliminating the need for costly infrastructural investment on the part of the advertiser. Why would a company invest scarce capital into an in-house mobile initiative when a mobile ad network can provide unique touches, penetration, and a sizable return at a fraction of the cost?

Other networks go further, bridging not only the content-viewing gap between smartphones and traditional handsets but also the gap between consumer touchpoints by offering partnerships with other media channels, including broadcast channels like radio and TV. These comprehensive networks represent the future of mobile advertising; by being highly accessible by both advertisers and publishers and highly visible by consumers, these networks can deliver as many as 200 million unique impressions per week.

Advertisers and publishers are realizing that mobile advertising, while effective on its own, is truly resonant when used in conjunction with other, more traditional media, or as part of a comprehensive, cross-media marketing strategy. In-store point of sale advertisement coupled with mCouponing, or mobile ads reinforced by radio spots: These kinetic combinations represent the way forward for advertisers seeking to reach their constituencies in relevant, actionable ways, and the path to these is being forged by leading mobile ad networks.

Publishers

On the other end of the mobile advertising spectrum are the publisher, the content provider, and the ultimate platform by which mobile advertisements reach the consumer. For them, these networks are a vital method by which to sell their remnant inventory -- that content not purchased at a premium. Remnant inventory sales are an important part of the mobile ad network business model, and are vital to top publishers seeking to distribute the bottom third of their content inventory.

But, ultimately, these are only part of the story.

Mobile ad networks have a nobler publishing use: They can provide a valuable platform for smaller and newer publishers. There is a long tail of independent content providers. While the open source revolution has essentially enabled an unlimited number of publishers, only the top 50 account for 91% of all mobile advertising revenue. The rest -- and for the mobile channel, 'the rest' signifies hundreds of thousands of publishers -- fighting for visibility and the remaining 9% of advertising revenue. An incoming publisher, new to the market, inherits a support structure and a distribution capability by engaging a mobile ad network that it would be hard pressed to achieve trying to sell content on its own.

Readers, this is not a bad thing. Ad networks link advertisers and publishers in ways that a market free of intermediaries could never achieve. Networks also provide crucial services to advertisers both new to the market and unwilling to assume the burden of in-house mobile marketing implementation. On the other side, mobile ad networks are key to distributing and selling all tiers of content inventory, and can help showcase emerging publishers.

The mobile ad network is here to stay, so get used to it.

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