The Problem With Mobile Is Perception

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For mobile advertising to succeed as a viable opportunity for advertisers, mobile needs to learn to value its own inventory better than it currently does -- and convey the perception of that value to marketers.

The simple fact is, there’s more potential advertising inventory on mobile devices than there is on the desktop. But the desktop is a significantly stronger market because pricing has settled and standard online publishers have found a way to value their inventory properly and convey that value to marketers. 

For this to happen for mobile, the space needs to overcome two challenges.  First of all, mobile publishers tend to accept ad buys that are based on cost per action or cost per install, and these kinds of ad buys devalue the perception of all inventory in the mobile landscape.  If you’re a media buyer and you know you can buy inventory on a performance basis, why would you pay full price?  It’s really that simple.  Any media buyers worth their salt will tell you they don’t need to pay full price for mobile – they can always go somewhere else and pay cheaper prices for what they consider to be comparable inventory.

The second issue is, there are very few, if any, true case studies that tout mobile as an effective medium for advertisers.  This is a similar problem to what standard online display faced back in the 2001-2002 time frame.  Then the IAB and other organizations came out with groundbreaking research and case studies that demonstrated the value inherent in advertising online for mainstream Fortune 100 marketers, with results based not on click-through but rather on the exposure and standard brand benefit of advertising online. 

This is what mobile needs to do: someone needs to step up and either donate the inventory to a Fortune 100 marketer, or sell it at cost, to ensure participation at a significant level and demonstrate that mobile is an effective ad vehicle.  If that happens, other marketers will take note, and the medium can start to have traction as a mainstream ad medium, especially if coupled with the stance by mobile publishers of refusing to accept CPA or CPI deals.

For mobile, it’s really about perception. Everyone knows and understands that mobile can generate reach, but the perception is, it cannot provide impact.  There are many steps being taken to create the same kinds of infrastructure around targeting and creative delivery in mobile that exists in standard online display.  We’ve even very close to the stage where you can recognize your customers and prospects across both platforms -- but now the proof is in the pudding, and the medium needs to demonstrate success for brand-benefit advertising.  It’s not a new problem, but the same issues that have faced every new medium that has ever existed, from newspaper and outdoor to online display.  The path to a solution is really no different either – it’s a matter of proving value and touting that value to the folks who have the budgets.

Do you agree with my simplification of the mobile challenge?  I know there’s more to it, for sure, but this is the core of the issue If the industry can step up, then there are some very bright days ahead.

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3 comments on "The Problem With Mobile Is Perception".

1. Kevin Carter from Radio One
   

   commented on: January 16, 2013 at 9:37 a.m.
   Great Article!!! I think we are moviing toward a more simplified solution for ad buying. An Advertiser should be about to pay one rate and reach a medium's users on the desktop as well as on mobile. On terestrial radio as well as streaming. The dollars are becoming too fragmented because there are so many options.
2. Tom Cunniff from Tom Cunniff
   

   commented on: January 16, 2013 at 10:42 a.m.
   In my opinion, mobile has enormous potential as a marketing medium but less as an advertising medium. (Here, I am defining mobile as smartphones. Tablets and phablets are more like PCs.) Mobile relies heavily on location, timeliness and utility -- as the *consumer* defines those things, NOT as a marketer defines them. Get all three right and you can work some serious magic. But without these three, the potential shrinks significantly. Travel brands should invest huge effort in mobile. But CPG brands like toothpaste might want to think twice. A common mistake marketers make is to ask "Mobile is hot, why aren't we there?" A better question: "How can our brand help make our consumers lives better using mobile?" The brands that manage to answer that question really well will reap huge rewards.
3. Gorzkowski Maciek from Machinima
   

   commented on: January 16, 2013 at 6:38 p.m.
   Good article Cory. I also think that as with all mediums, it's not always copying what's been done before, but leveraging the difference and benefit of the nature of the 'new' medium. Eg. TV is about storytelling, mobile is about it being with you, everywhere, all the time - then developing advertising/marketing opportunities around those attributes. Surely, there must be a unique value to be explored based on that alone.

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