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The Billions In Mobile Ad Money Nobody Can Grab
jfruh writes "Here's a pressing mystery: despite users spending an increasing amount on their mobile phones, mobiile advertising only produces 20% of the revenues per page that web advertising does. This seems like a big opportunity for somebody, but a whole complex of reasons might mean that it isn't just a matter of someone being smart enough to do mobile ads right. The whole advertising industry, which in many ways still resembles the Mad Men-era old boy's network, simply may not be equipped to cope."
The screen real-estate on a mobile device is too tight for an add to be non-intrusive and simply piss people off. Annoyed customers are not paying customers.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
Be honest those of you who have a smart phone, when is the last time you saw an ad on it and seriously thought about even clicking it, much less spending money on what was shown?
What do I know, I'm just an idiot, right?
Acceptable Mobile Ads: Takes up the edge of the screen (or otherwise unused area), is not distracting (flashing, music, etc) and is primarily on pages/screens that I'm not going to spend a lot of time on, such as title screens, login screens, etc
The more an ad looks like content (as opposed to "attention grabbing", the more likely I am to pay attention to it. The more likely I am to pay attention to it, the more likely I am to click it if I'm interested. If your ad flashes yellow flying monkeys and blares music then I'm going to ignore it even if it's something I may be interested in. The advertising industry has taught us to tune out the annoying ads completely. Also, if an app has an ad splash screen (especially one that cannot be skipped), I will stop using that app altogether regardless of how well done, relevant, etc the ad itself is.
I saw an ad once that interested me, but I didn't click on it simply because it would have exited the app I was in and switched to a web browser. If my phone had the equivalent of a taskbar that allows you to quickly and easily switch between open programs, then I probably would have clicked it. Of course, that was one ad in the seven months I've owned a smartphone.
Advertising isn't always about getting you to buy a product then and there. While that's nice, it can be much more subtle than that. For instance I've never seen a TV ad for mouth wash and rushed out to the store right after to buy some. But the next time I did actually want to buy mouthwash, I went to the grocery store and was confronted with about half a dozen brands. Which one do I buy? Well, probably the one that is more familiar to me, the one I have seen advertised the most.
Latin mille, meaning one thousand.
Not really a mystery. M = 1000 in Latin
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My own theory is that the whole "personalized ads" concept is bullshit, at least when it's taken as far as it is now.
Someone who knows me EXACTLY (which seems to be what they're trying to do) would recommend to me pretty much just the things I already buy, and would buy anyways. I don't think I've *ever* clicked on an ad and bought what they were selling. Even if they could read my mind, all they would really be doing is giving me the link I'd be clicking on in a few seconds *anyways*.
In fact, it seems to do the exact opposite. I bought an SSD recently, and ever since my GMail has been showing nothing but ads for SSDs. Way to completely miss your chance - I probably won't need another for months, at the earliest. Or when I bought a laptop, for the next few weeks it was showing ads for Alienware laptops.
And then sometimes it gets things just completely, absolutely wrong. I swear that at one point, my Droid was *convinced* that I was a gay black man with AIDS. Wrong on all counts save that yes, I am male. I don't even know how it came up with that - there is literally nothing I've done that would support that idea. Needless to say, the "gay thug dating" and "HIV testing" ads had a zero chance of getting money from me (although it did get quite a few laughs).
So maybe the problem is that the entire framework of economic/advertising theories they're working on are *wrong*. Like when all the physicists' theories about the luminiferous ether had to be thrown out when it was demonstrated that no such thing existed. I would not be surprised if, decades from now, we look back at all this tracking and personalized advertising the way we currently look back at the "radiation" fad of the 50's - a lot of really bad ideas that we now know are completely wrong.
That's only if everybody decides to read web pages exclusively from mobile gadgets. That's not likely to happen.
I don't respond to AC's.
Android has a task bar type thing. When you hold the "Home" button for 3 seconds it brings up you most recent applications. Tapping on an application pulls it's most recent state from the stack and restores it exactly as you left it.
--Sparksis
One thing could potentially be quantified: what proportion of online spending is made from a mobile device? Of course, that doesn't account for brand advertising, where the goal is just to make your logo more familiar to people, as opposed to actually convert a sale. But it would be somewhere to start, by telling us whether, at least in conversion-focused advertising, mobile advertising is under- or over-performing relative to the amount of commerce that takes place on the platform.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
There's the screen real estate problem, of course. More important, though, is the business model. Phones are sold to carriers. They make their money from service charges. They don't need ads. They'd rather have paid services be paid for through them.
"The whole advertising industry, which in many ways still resembles the Mad Men-era old boy's network, simply may not be equipped to cope."
Or vagina.
Okay, so desktops get x clicks/1000 views, and because mobile devices get 0.2(x)/1000 views I'm supposed to believe that there is money there waiting to be grabbed?
Bullshit.
The use patterns on phones and tablets is fundamentally different than on a desktop. There is absolutely no reason to assume that the advertising done (no matter how) will provide the same results.
note: I'm not attempting to state that the money definitively isn't there, but comparing clicks between two completely different formats is hardly proof that there is.
No, but it's worth trying first. Store brands are almost always of sufficient quality that it doesn't make economic sense to pay more for a marginal increase in quality. And a lot of the quality that people assign to name brands only exists in their heads. You tend to like what you're used to. If you get in the habit of trying generics often, you don't get used to more expensive brands that aren't actually any better.
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The whole ad industry and it's suppliers (Google, FB etc) are run by marketers. The fundamental theory that drives marketing is that the more you advertise, the better you sell (up to a point of marginal returns). No one has seriously looked at this approach to marketing in a long time. The result is that the billions spent on TV/Radio/Newspaper are moving to online advertising. While online advertising offers improved feedback, it basically is push advertising - shoving something in front of you in the hope that you will bite. Well, think for yourself, does that work for you? I, mostly, am supremely annoyed by push ads and I think the age of push ads will quickly die. In the future, marketers will have to engage more personally with buyers and require more humans to interact with buyers to form some sort of trust. The age of holding (and hiding behind) a big megaphone and blasting your message will quickly come to an end.
I will begin by positing the following: That it's pretty obvious that the less removed the advertisee is from the product, the more impulse-driven the advertising becomes.
This is clearly illustrated in the following:
-TV commercials (most removed) that try to get you to remember a name for the next time you need to say, buy life insurance.
-Internet ads (on a PC, getting warmer) that want you to click and enter some CC info while distracting you from what you were doing.
-Targeted internet ads (such as from a store that already has your info suggesting other products) where you can basically "one-click" your way to poverty.
-Finally product labels (in a store, knowing you already are there, in that aisle, for the purpose of buying a product) which try to out-shine the next guy with colors and swooping patterns.
And there's clearly a well-established economics set up for the last two, considering the click-through payments that online retailers will give to advertising partners, as well as grocery stores putting their own generic brand in some of the most visible spots next to well-known brands.
Now we take a look at mobile devices and what do we see?
As far as immediacy goes, they rest somewhere between generic internet ads and the more targeted ads. But why is there such a price parity?
Think about filling out a full billing or credit card address form, one letter at a time, with hilarious auto-correct.
Think about punching your full credit card info into any mobile app.
And finally, keep in mind that certain products (iTunes) which do offer features (all payment info stored centrally) to exploit such impulsiveness tend to do fairly well revenue wise.
If you think about the two bolded concepts of immediacy and impulsiveness, it's pretty easy to see that the issue of the mobile space is not so much that it's an "old-boy's" network with a failure to adapt, but that a lack (even if perceived) of any trustworthy impulsive payment method is what moves its effectiveness as an advertising channel from that of click-to-buy to something more comparable to a TV jingle.
To write a summary about the failure of mobile ads based on an analysis epitomized by a fucking TV show on the other hand, makes it seem that the whole ITWorld crew in many ways still resembles the Mad Men-era old boy's network, and simply may not be equipped to cope. ;)
I think those billions in potential ad revenue are currently hidden in the same account with the unrealized potential profits of the *AA recording companies.
I'm even more glad they didn't waste any time in advertising.
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
which in many ways still resembles the Mad Men-era old boy's network, simply may not be equipped to cope."
Citation please. Everyone I know working in advertising or even anywhere near it is obsessed with quantifying, measuring, targeting, and tailoring. Most of that is at least as high tech as developing any other kind of web application. I think they are "up to the challenge," and trust me I really wish they weren't.
There are probably a good number of Don Drapper like dinosaurs still roaming the halls of ad agencies; possibly especially in "creative" but most of the industry is pretty scientific now and has been for quite some time.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
good info
hello, north american providers:
what gives? such a cheap easy offering, such obvious appeal to consumers
are we really talking about a cheap easy hardware setup not allowed simply because you assholes can't monetize it?
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
Depends on the application, and the device.
On my OG Droid, for instance, there's an excellent chance that switching from $randomapp to $randombrowser, doing some browsing, and then switching back is going to fail at resurrecting $randomapp's state due to RAM starvation issues.
Now, sure: In a perfect world where RAM is unlimited and programmers know what they're doing, this all works fine, every time.
But that's the same mythological world where pulleys are frictionless, rope doesn't stretch, love is free, and unicorns are real.
Kid-proof tablet..
Advertising is unwanted, and intended to mislead. It is especially obnoxious on a platform that costs a lot of money and has a small screen. Phones and plans are expensive and then on top of that you tell people they are going to see ads? They're not going to be happy. I especially hate efforts to spy on me in order to increase the effectiveness of ads that I don't want to see for products I don't want.
Moreover, I find *ALL* advertising to be annoying and unwanted, the more custom tailored it is to me the more offensive I find it. Also, advertising seems to operate under the assumption that people have money to spend. Tell me, how is an advertising based economy going to work when every year more and more people are unemployed? I don't care how targeted and relevant your ads are, people without jobs aren't going to buy your product/service.
The advertising economy is headed for a huge crash, and mobile is just an especially obvious example. It's a scam, top to bottom.
If you build it, nerds will come. Soylentnews.org
Then it's not a smartphone. Even my old Nokia with Symbian 60 had task switching. RTFM
I bought the type of mouthwash that my dentist told me to buy. He said to buy ACT, or a generic equivalent as long as the active ingredients were the same. I've never seen an ad for ACT anywhere. If I did I'd probably stop buying it. Now, maybe they advertised to my dentist and got him to recommend it, but I doubt it.
There are a lot of people like me who consider advertising to be an insult to our intelligence and free will. Advertising isn't meant to inform, it's meant to deceive in a way that goes right up to that line of lying -- but in theory not cross it. They often do cross the line into outright lies, and then our legal system has to kick in. It's a huge waste of human effort and time all around.
If you build it, nerds will come. Soylentnews.org
Lots of phones DO have FM. Try connecting headphones and launching the 'music' app. You might be surprised. I had my Photon for almost 5 months before I stumbled over that feature by accident. I was expecting it to exist (if it did) as a "FM Radio" app, not as part of the "Music" app.
As far as TV goes, it's probably a lost cause. As a practical matter, a high end Android phone already has 80% of the hardware it needs to receive HDTV, and roughly half the remaining 20% consists of "an appropriate antenna" (believe it or not, the ATSC tuner is the least of your problems... it's a single chip that converts 8VSB-modulated radio into a ~19mbit/sec bitstream that the phone's existing hardware can deal with downstream). So, why don't manufacturers bother? Mainly, because American 8VSB-modulated HDTV is hard enough to reliably receive with a PROPER antenna, let alone a pair of headphones plugged into a headphone jack. Don't believe me? Buy a 99-cent UHF loop on eBay, connect it to your HDTV (through an appropriate 300-to-75-ohm balun if necessary), and see how many channels you can actually tune indoors with it. If you're lucky and live in the mid-suburbs approximately 5 miles from the local antenna farm, you might get one or two reliably. If you're downtown, you'll be lucky to get any at all.
It's a fundamental problem with 8VSB modulation. Back in the early 90s, engineers told the FCC & "Grand Alliance" they could optimize for range or robustness, but not both. They were told to optimize for range, and they did. With a proper 2-3 story tall directional high-gain yagi pointed directly at the transmitter, properly grounded, you can receive most American TV stations from 60 miles away with minimal effort, and up to 100 or so miles away if you really work at it. However, the moment multipath distortion (basically, echoes from signals bouncing ricocheting off buildings and mountains) becomes a factor, you can forget about receiving a viable ATSC signal at all. Analog UHF manifested multipath as "ghosting". Digital ATSC manifests multipath as "no signal".
HDTV tuners work in many other countries, because they went with a competing modulation standard called COFDM. COFDM's engineers made the opposite choice of American engineers. Instead of optimizing for range, they optimized for robust reception in conditions where multipath distortion would normally be a problem. The downside is that even a great antenna is unlikely to receive a viable COFDM signal more than 50 miles away. The upside is that you can sit in a moving vehicle driving around the central business district full of skyscrapers in some Asian boomtown and have a perfectly good signal to watch.
As bad as 8VSB is today, it was even WORSE 10 years ago. At least now, it's possible to semi-reliably tune with an indoor antenna if it's a GOOD one. You're still unlikely to get anything consistently watchable from the modern equivalent of a coat hanger (a pair of headphones plugged into a jack). Unfortunately, we've now come about as far as we can with DSPs, and future improvements to 8VSB are going to require extensions that will be backwards-compatible (ie, won't screw up existing tuners), but won't do anything to HELP old tuners. The work has been in progress for the past few years, mostly at the behest of FEMA, due to a very real fear that the next time a hurricane like Andrew roars ashore, people old enough to remember watching newscasters huddling under their desks in Miami during Andrew won't have a viable signal AT ALL, because just the wind-induced antenna motion will be enough to nuke the signal for many viewers (8VSB makes HEAVY use of phase relationships that all pretty much assume an antenna that's stationary, or at least moving in a straight line along a single plane of motion relative to the receiving antenna; flex and wobble the antenna, and that assumption goes out the window). The last time I checked, ATSC-M has been held back by a few things, not the least of which is the knowledge that they're going to get exactly one chance to fi