So Will Mobile Advertising Really Explode as Predicted or Is this the Best it’s Going to Get?

By: Hillel Fuld (@hilzfuld)

Let’s just skip the part where I tell you just how big mobile is. We all agree, it is big. But what about advertising on mobile devices? Ever since the introduction of the cellular device, all anyone could think about was how brands can get their ads on those relatively small screens. The predictions were that this space would reach tens of billions of dollars in the coming years.

Meanwhile, as Henry Blodget points out, that explosion is yet to take place. He writes that five years after everyone thought the iPhone would bring on the mobile advertising explosion “Mobile advertising is still relatively tiny–around $1 billion globally in 2011. That’s a drop in the bucket of the broader Internet ad market, which hit $32 billion in the U.S. alone.” He is right. But he also forgot a few things in his analysis.

A new study by Juniper predicts that “increased app usage globally will help increase spending on in-app advertising from $2.4 billion this year to $7.1 billion by 2015.” So what is the key to this optimistic growth prediction? In two words:” Rich media”.

Yes, display advertising on mobile phones has not yet exploded or reached the numbers we have experienced on the Web. There is no denying that. The thing is, phones like the iPhone 4S or the Galaxy SIII were not born for display advertising. That is like putting a bicycle pedal in a Maserati.

Why serve text or banner ads to users on a phone with a higher resolution screen than most of our TVs and that includes sensors and capabilities our computers can only dream of? The key here is to leverage these advanced platforms we call smartphones to reach users in a compelling, engaging, and non annoying way. Remember, we are not talking about a 24′ screen in which you can just choose to ignore an ad. On a 4′ screen, displaying an intrusive, not relevant, and annoying ad will not accomplish its goal.

So what is the discrepancy between the analyst predictions of mobile advertising reaching the tens of billions of dollars and its current state of a billion and change? The answer is that mobile technology is moving faster than the advertising world. Mobile ads are chasing the smartphone and have not yet caught up.

You don’t have to be a rocket scientist to understand that a user will click an ad ten times more when it is an ad for a vendor the user is passing by at this very moment, as opposed to a static ad for a brand that does not appeal to that user in any way. That can be done using location sensors in every modern smartphone.

It is no surprise to anyone that a user will be more open to watching an interactive video presentation about a new sports car over clicking a banner ad that will most likely lead the user to a sign up page in the best case scenario or a 404 page in the worst case. That can be done using  HTML 5 or video capabilities that again, are present in all modern smartphones.

So, bottom line? Yes, mobile advertising will not only meet analyst predictions, it will match those predictions and then some. When can we expect to see this come to fruition? As soon as rich media and hyper-local advertising reaches advertiser consciousness.

Here at inneractive, our SDKs support rich media including video, and we can also target by location. Guess what? The numbers are in and they are indisputable. Developers that work with rich media and advanced advertising capabilities see engagement that display advertising can only dream of. More engagement means more revenue for the developer but more importantly, it means more spending from the advertiser.

So yes, mobile advertising is about to explode as soon as advertisers catch up to the pace at which mobile technology is moving. This chase is as fast and exciting as one in any good action movie, so hold on to your seats, it’s going to be a fun ride and when the chase ends, that is when the real fun begins.

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