By Janet Jaiswal
Director of Enterprise BU & Mobile Product Manager
Mobile advertising growth continues
There is no doubt that advertising is here to stay. Even if the number of ads delivered to the mobile device is small today, it is projected to increase by large percentages so many companies are rushing to take advantage of the opportunity. Witness the acquisition of AdMob by Google and Quattro Wireless by Apple to form the iAd Advertising Network. In addition, large Internet giants such as Yahoo, Microsoft and AOL and newer entrants such as JumpTap and Millennial Media are eagerly building up their offerings to provide advertising via mobile devices.
How big is mobile advertising going to be? Gartner predict that $7.5 billion will be spent annually on mobile advertising by 2012 and mobile applications will be the primary vehicle that drives a substantial portion of that market.
In addition, the Mobile Marketing Association did a study finding that nearly half of those using mobile phones have taken action on mobile ads.
Finally, BuzzCity’s Global Mobile Advertising Index for Q3 2010 shows that the worldwide growth in mobile advertising is 17 percent with the US experiencing an impressive 30 percent growth with nearly 980 million mobile ad banners.
Why is mobile advertising important?
Today, free apps account for roughly 70% of the Android Marketplace and 30% of the Apple store. This trend, combined with the ever increasing number of apps in the market place, is causing developers to view advertising dollars as a way to better monetize their offerings.
In addition, 1020 Placecast, a geo-based mobile marketing provider did a survey on consumer’s receptivity to opt-in mobile marketing. The survey revealed that those with children under 12 were most receptive to location-based mobile advertising and more than 30% favored opt-in alerts that arrived via their mobile phone. The primary reason for accepting advertising is that these users received coupons, promotions and rewards as a result. However, this trend is not isolated to those with children under 12; most users are willing to receive advertising as long as they receive a compelling benefit in return.
How are ads delivered anyway?
There is a wide range of delivery mechanisms for advertising ranging from text ads to interactive multimedia campaigns. However, in-app ads which present links, clickable banners or simple logos inside mobile applications have become a key underpinning in the advertising space. Furthermore, Advertisers will play an important role in bridging the gap between consumers, who are often unwilling to pay much (if at all) for mobile data and publishers who are experimenting to find the best way to monetize their applications.
Users are suspicious of advertising
Consumer willingness to accept advertising on their devices has long been in doubt, but it appears that ads can be as effective on a phone as they are online. Users generally understand and accept that a trade-off has to be made and that for them to access free content, they have to be exposed to ads. To achieve an advertiser’s goal users must click on the ads and eventually make a purchase. However, advertisers will need to gain their users’ trust in order for this goal to be achieved. This is not easy as consumers are wary of smart mobile devices due to their relative newness. Furthermore, advertising on mobile devices combined with the use of geo-location, behavioral targeting and social networking technologies leads to even more user suspicion. To combat some suspicion related to mobile advertising, app developers will need to provide a clear benefit to users in exchange for interacting with their app or share their information. Benefits such as compelling content, discounts and rewards have to be high enough for users to share their information.
Serve advertising without losing user trust
Advertising, in general, represents a large opportunity especially geo-location for advertisers who want to market messages to users based on their specific location and time. These types of highly targeted ads can be particularly effective thus highly lucrative for publishers and developers. However, they can also be seen as a major invasion of privacy by users who don’t want advertisers to look over their shoulders. Therefore, advertisers and their partners must not only give users ways to prevent their information from being shared but also make it easy for their users to view what kind of information is being shared and control what is being shared.
If these kinds of tools aren’t introduced to the market in a way that is easily visible for mainstream users, federal regulators will step in. It’s possible that such a move may be years in the future but it will spell trouble for all the players in the value chain.
A better option may be privacy certification by a third party such as TRUSTe. TRUSTe’s mobile privacy certification allows mobile web site and app developers to safely utilize all forms of advertising and collect user information while lessening user concern and suspicion. In addition, the display of the TRUSTe trust mark serves as a clear notice that an independent third-party stands behind the app’s data collection practices, for example and its use of user data is clear and transparent. To learn more about
TRUSTe’s mobile app and mobile web certification for privacy, go to www.truste.com/mobile.