Saturday, August 13, 2011

In Search Of: the Underlying Strategy in Mobile Advertising

Perhaps your experience is similar to mine. Recently, I've notice what seems like an increasing number ads in the apps that I use on my phone. We all understand the basic idea -- mobile use is increasing, there is strong engagement with mobile devices, so more engaged eyeballs equals conversions and results... or at the very least, a more enticing opportunity for market program dollars.

While I can understand these app platforms looking for ways to monetize the software, realistically, the only times that I've clicked on them were accidents. I know I'm not the only one who acts this way, so it makes me wonder about certain aspects of the mobile advertising market.

Online Advertising Has Always Sucked -- Well, Almost Always
Before we go further, I should note that I'm rather skeptical about many aspects of Internet advertising. In the days before Google and PPC advertising on search, Internet advertising sucked for a bunch of reasons. Of course, that didn't prevent some of our colleagues from burning marketing dollars on these crappy programs. But for many of us in those days, Internet advertising was simply a B2B scam grifting marketing budgets.

Adwords really changed everything. Adwords was different because in many ways it provided consumers a value-added experience -- when they clicked through an Adword listing, they were interested in your product and often ready to buy. Adwords also set a new benchmark for ROI on advertising dollars with pay-per-click, an ecosystem that was designed to prevent spammy advertising noise, and a focus on blocking irrelevant content.

For a time, there was no better benchmark for advertising ROI than Google Adwords. But as the market matured, we also saw the era of click-fraud and of ecosystems devoted to farming revenue from Adsense. There was money there and everyone wanted a piece. But more than anything, what Google Adwords did was prove the viability of online advertising as a sustainable revenue engine.

Online display advertising had it's own drivers. While content publishers have looked for ways to make ads more like traditional print and television ads, it's been all about narrow-casting and individual user profiles on the back end. Similar to the spyware/malware elements that pioneered some of the display ad networks, today's Internet advertising networks collect user data and use that information to shape the content that gets pushed to the user across the entire ad network. Visit a travel site and you see travel ads on all of the web pages that you go to from there.

For marketers, leveraging demographic intelligence in online advertising can improve conversions. Of course, if you follow back through to the Scamville posts about Facebook/social network game advertising, this same level of intelligence can also be applied to manipulate users or potentially take advantage of marketers.

So What About Mobile Advertising
In looking at the ecosystem, the goal is think about whether this is a viable marketing outlet or yet another way to scam dollars from a marketing budget. And, if its a viable platform, for which types of products or markets. Beyond ROI or a specific advertising network company's sales pitch, it's important to build a theoretical framework of expectations.  

Let's start with a couple of assumptions. First, let's assume that some of the people directing these advertising programs have a strategy, a plan, use metrics, and see real ROI on their mobile platform advertising. Within the system, somewhere, there are probably people getting some benefit from these mobile ad programs. So, working from the other end of the spectrum and attempting to define some personas, under what circumstances would you click through an ad on your phone (other than accidentally)?

Most mobile apps are designed around very focused, narrow use cases. Get in, use the app, get out. If the ad is supposed to provide you with a gateway to additional information, why isn't that information integrated into the core functionality of the app?

One common approach for mobile apps is to place the ad close to the area that you have to click in order to enter text. Getting ready to type in a search term? Be precise with your aim or you'll click through an ad. I suspect that this design approach is a two-fold strategy that underlies a large percentage of in-app mobile advertising.
  1. Artificially inflate click-through-rates to deceptively sell advertisers on mobile ad ROI. 
  2. Create a nuisance tax for consumers in order to drive the up-sell purchase of ad-free platforms. 
The second approach tends to work like television commercials, popping a splash screen or video segment before the user is taken to the content or application functionality that they are seeking. If seen this approach used prominently in games like EA's Scrabble and applications like the Epicurious recipe tool. If most people are like me, they they are probably clicking through simply to get past the ad as quickly as possible or ignoring the video clip while it runs.

Again, I suspect that the key drivers for this type of advertising are the same as above with one caveat being that many of these types of ads contain poorly written code that causes the application to lock-up. EA's Scrabble, for example, relentlessly consumes battery life and I've even heard audio from ads running in the background even as the application had moved forward.

Mobile Advertising Strategy In Sum
At this point, I have a hard time conceptualizing a market or a product that would be a good candidate for mobile advertising. If I were directing an ad spend, I would keep my dollars out of mobile. Consider, even for the poorly implemented ads that caused problems with application hangs, I don't even know remember enough about the specific advertisers or products to be angry at them -- for a variety of reasons, the ads didn't even work on that level.

I definitely would not believe anything I was being sold when it came to mobile CPC. In my mind, if there is a case for mobile, it's probably a CPM placement, and even then, I have to think that there are better channels.

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