How the smartphone killed mobile advertising


There is a common misconception that the mobile ad space remains inherently different from online advertising. This misunderstanding was born in the days before smartphone and tablets, when the fragmentation of devices and operating systems made it difficult to reach consumers. Today this is no longer the case. We need to stop treating mobile different, and realize that its now just another digital screen. It is standardized and scalable. Advertisers can now reach 100 billion impressions per month through a single size banner (300×50).

Mobile Advertising 101: Fragmentation and Porting

The world was very different when marketers first starting thinking about reaching consumers through their mobile phones. Around 2001 Europeans had embraced messaging as a new way of communication, and marketers realized the opportunity to reach them away from their couch. The first mobile advertising campaigns we ran at YellowPepper in 2003 were naturally txt based.

One of the earliest campaigns we ran was a fishing game for a beer company, in which players caught various size fish to win a year’s supply of beer. The interaction rates were so high that we burned out the servers, and increases sales by 3%. It was then that we knew mobile advertising had a future.

SMS (TXT) should have been ubiquitous , as all phones can send and receive text messages, but for marketers this was not the case. Each carrier set up their own shortcodes, and at the time it was not possible to txt from a Verizon phone to an ATT shortcode. This initiated the mobile advertising fragmentation decade, which really only ended with the introduction of the iPhone.

Before the iPhone the mobile web was dominated by WAP – the precursor to the mobile web. Each device had a different operation system, and each phone had a different browser. To create a mobile website, marketers had to build hundreds of sites for various capabilities and sizes. A multitude of companies were created to help brands and media companies accomplish this.

The madness peaked when the ecosystem started building applications for these devices. Companies had to create a new application for each handset. The process, which became known as “porting” was a highly labor intensive, required special knowledge, and engineering talent.

Of course in those days, it was almost impossible to conceive a mobile advertising campaign with a single creative that would reach a significant number of consumers. This lead to the emergence of mobile ad networks such as Third Screen Media, Enpocket, Jumptap, and Admob. These firms aggregated and standardized this highly fragmented inventory and helped marketers to execute campaigns.

This was mobile advertising 101. A small stand-alone ecosystem dominated by mobile companies.

Mobile Advertising Today

Today the fragmentation is quickly coming to an end. Smartphones and tablets will outnumber features phones at the end of this year (Nielsen 2011), and most web traffic is already on smartphones today. Almost all smart phone screen sizes tend to be around 300 pixels wide, and the majority of mobile browsers are closely related to full PC browsers.

As such the smartphone killed the mobile advertising ecosystem – and that is a good thing. For mobile advertisers and publishers this results in a transition from a mobile stand-alone environment to a connected ecosystem. This will lead to greater efficiencies, as advertisers can use existing infrastructure to execute large-scale campaigns. Of course it does not mean that every screen needs its specialists. Mobile advertising firms will continue to strive, as they understand how to interact with consumers on the go. But this shared infrastructure opens the door for cross-platform buys in which publishers can package users across multiple channels (web and mobile) to provide a convenient means for buyers to reach their audiences.

The mobile revolution has just begun. If the consumer enthusiasm of the last 12 months is any indication of what’s to come, get ready for a very exciting 2012.

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