The Trouble with Mobile Ads

By Carla Rover • July 12, 2011 •

Apple’s launch of iAds a year ago this month was meant to usher in a new era of mobile ads that didn’t “suck,” but it hasn’t turned out that way as brand spending on rich media mobile units still lags.

The fault for this gap is, according to Medialets CEO Eric Litman, can be attributed to a branding problem within the mobile advertising industry itself. Rich media advertising on mobile, according to Litman, has been a victim of poor marketing. Although static display on mobile dramatically underperforms rich media, marketers have stuck with static advertising on mobile because many believe it’s “cheaper and easier” to put a standard banner on a mobile platform, and, Litman believes, the rich media industry hasn’t risen to the challenge of communicating the effectiveness of mobile in comparison to online’s standard returns.

Mobile is a more personal medium than online with a greater variety of engagement possibilities, Litman said. Mobile rich media ads, because of static display’s legacy as the origin of mobile advertising, have been viewed as an add-ons by many brands, but recent data has shown that rich media performs better across the board. According to Medialets, rich media in mobile ads lifts engagement by 10 percent. Google’s AdMob ran campaigns for Reebook and Coldwell Banker that showed engagement rates for rich media ads ranging from 5 to 7 percent.

“If you look at the way the rich media mobile industry has developed it’s been largely a services industry,” said Litman. “It can do a really good job with fully custom creatives, but the industry has really never figured out how to make it scale even bigger. You can only do so many things via a services business.” That emphasis on services created a mobile advertising industry featuring solutions that were either top of the pyramid rich media mobile executions such as full-page take-overs or a bottom tier of banner ads with little or no interactivity.

The crucial middle tier of rich media mobile advertising, between high-priced, elaborate ads and standard banners, is a “highly fragmented” space that “rich media providers have never done a particularly good job at creating for scale or even providing,” said Litman. “The products that are produced are either too technical or the creatives that are produced by them just aren’t very interesting. You usually end up with this mid-tier, techie product that doesn’t really meet any particular market need.”

This creates a dilemma for marketers who are driven to either choose a static banner that may produce less impact than desired or be forced to the top-of-the-line products with perhaps prohibitive pricing.

Litman said that brands need battle-tested blueprints for rich media strategy, which are composed of data-driven insights on effective mobile rich media campaigns. The industry has more often than not provided cookie-cutter creative and last-click-oriented analysis for targeting rather than a series of standards for the implementation of actionable insights for judging what truly constitutes ROI in mobile. That absence doesn’t help rich mobile media scale or garner ad spend more rapidly, Litman believes, and it will continue to be a hindrance to faster growth until rich mobile advertising moves beyond the old ideas of what advertisers need from vendors and platforms.

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The Trouble with Mobile Ads

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