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Defending the Future of Mobile Ads

The first time I read Fred Wilson’s Mobile is Where the Growth Is I was disturbed. I commented. Not what I really wanted to say but I said something. The second time I read it I had to write a blog response.

Now I agree there’s a shift happening. But…

Screen Shot 2012-07-09 at 8.51.25 AM

This is unknown. Foursquare hasn’t seemed to capitalize on any shift to mobile (it’s not like people didn’t have iPhones 2 years ago) and Instagram already gained a lot. So I don’t see how we know how this will shake out.

What we do know is that Google is kicking ass with Mobile Search. It's growing as fast as the early years of desktop from a bulk query basis. It's also going tp be 25% of Google's Paid Clicks this year (Marin report). Since most of these queries and dollars appear to be incremental I don't see how Google will lose anything in this transition.

But here’s where I really got upset:

Screen Shot 2012-07-09 at 8.51.50 AM

Again, this is the super early days. Yes, the one display unit (300x50) that has permeated mobile (and resulting in some pretty big exits already mind you) doesn’t work as well overall on mobile as the web. But Search Ads are performing markedly better! CTR is 75% higher on smartphones and 25% higher on tablets than desktop for Search (again Marin report 3/12).

Banners do work on the web. I can name 5 companies (including ours) that are kicking ass with banners. I’m not really sure why everyone seems to want to bang the 'banners don’t work' drum (actually I have my suspicions why) but clearly there’s a reason the smartest web advertising company in the world has dedicated the past 3 years to the endeavor.

On the last point as any in mobile media know ARPU is not a display advertising metric of success. User metrics don’t always equate with advertiser goals, the goals that ultimately determine media value.

At the end Fred says that he’s not really sure what’s going to happen. He’s right, nobody does. Mobile is a media shift as large as the introduction of the web itself. I wouldn’t be surprised in 5 years if one of the leading web properties was mobile only and had an amazing ad business.

 

 

 

 

 

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Comments

Is Yieldbot really three years old now? Zing!

Great article, Jonathan. I learned a lot about mobile ads. Thanks for the information about the future of mobile ads.

Right. The future of mobile ads is here. It's a ripe time to shift our focus on this vehicle. I see a bright future ahead for mobile marketing as a whole.

Technology is moving so fast nowadays it is hard to keep up. I didn't know anything about mobile ads before. Thanks.

Yes mobile ads will be the most demand-able ads because our most time spent on PC internet or mobile internet. But if we think our most time in mobile. So this right that oneday mobile ads will be more valuable than TV channel ads

Amazing how technology works, wonder how ads would work for a construction site?

Art Pinto
www.decorativeconcrete.com

Agree that we are too early to know.

And as one of the early investors/executives in the DCO space, I have to agree that banner ads can indeed kick butt.

But IMO, "display ads" need to become much more personalized and value-added to perform well in mobile. The user environment and attention span are markedly different in mobile ("watch out for that bus!") than desktop/laptop web ("honey, you want cream in your coffee?").

Here's a decent Quora thread on the future of mobile ads:

http://www.quora.com/What-is-the-future-of-mobile-advertising

Vernon Niven
CEO & founder
www.needtagger.com

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