• by Mark Walsh  @markfwal, February 3, 2010

Mobile advertising promises higher response rates than the desktop Web, but is more hampered than ever by a fragmented landscape of different devices, operating systems and application storefronts. That was the paradox highlighted by a panel of mobile marketing and media experts at the OnMedia NYC event Tuesday.

The lure of relatively high click-through rates on mobile is offset by the difficulty of buying advertising across a growing array of smartphones with separate operating systems and app stores as well as an emerging class of devices like e-book readers and the iPad that fall between phones and computers.

That's not to mention the disruption of ad-focused companies like Google getting into the handset business with the Nexus One and hardware makers like Apple jumping into mobile advertising with its planned acquisition of Quattro Wireless.

"Things are changing very rapidly," said Jeff Litvack, GM, mobile and emerging products at Associated Press, which has been an active player in mobile content. "One of the hardest things about mobile is the different ad units and placements and what value they ultimately bring to brands. Every device has its own unique solution. It makes buying advertising more difficult than we would like."

In addition to operating a mobile site, the AP also offers a free news app and a paid AP Stylebook app for the iPhone as well as apps for Google's Android system. The arrival of in-between mobile devices like the iPad, requiring specialized ad formats, will only make ad-buying that much more challenging.

Indeed, panelists emphasized that marketers must consider the differences among devices and the different audiences they represent. Michael Moroney, senior vice president of digital at TBA Global, described a dichotomy between advertisers like Samsung targeting tech-savvy users on smartphones and clients like Western Union and Wal-Mart with SMS text campaigns focused on regular phone users.

"What's fascinating is that even though everybody sees where the technology is going, most of the audience remains on feature phones," said Moroney. "And SMS is the best way of engaging that audience."

At the high end, where users are increasingly watching video, Web browsing and playing games on smartphones, bandwidth limitations remain a barrier to greater usage. Companies like JiWire, which its CEO Dave Courtney described as the largest Wi-Fi-powered media channel, aim to offer an alternative to the carriers' 3G networks to deliver mobile programming.

In exchange for viewers watching video ads on the ad network, advertisers such as Microsoft will sponsor 20 to 30 minutes of free Wi-Fi service. "It's not only great for [ad] engagement, but providing something of value to customers," said Courtney.

Frank Barbieri, CEO of mobile video provider Transpera, agreed that Wi-Fi access was a key to mobile video, with 70% of the pre-roll ads on long-form content viewed via Wi-Fi connections. "The key from an ad perspective is that when you capture that user you have an incredibly engaged consumer," he said.

One thing the mobile mavens are not worried about is competition from the carriers when it comes to expanding into mobile content or marketing. Wireless operators "are notoriously, flamboyantly bad at developing operating platforms and stores," said Barbieri. "They're good at billing and using data in an opt-in way that provides value to consumers."

Courtney agreed. "When they branch out into content or messaging of a creative nature, that's way beyond their realm of specialization. Most of the carriers we partner with recognize that," he said. But that hasn't stopped the likes of AT&T and Verizon from launching their own app storefronts and mobile media offerings.