Will Mobile Revolutionize Advertising–Or Kill It?

It’s obvious by now that plastering banner ads on tiny phone screens is a nonstarter with everyone from smartphone users to advertisers. That’s a big reason why mobile advertising revenues trail far behind the relative time spent on mobile devices vs. the Web.

So what will work? According to a group of ad folks today at MIT Technology Review magazine’s Mobile Summit in San Francisco on Monday, a lot of personalization from targeting and new formats that aren’t really even advertising.

But nobody had completely convincing answers. Neither the agencies nor the marketers have any idea what good persuasion will look like on the mobile Web, said Jason Pontin, publisher and editor in chief of Technology Review (for which I also write).

But they’re hard at work trying to figure it it. It’s pretty well known by now, for instance, that Facebook FB -0.54% has turned the company hard toward mobile since its lackluster initial public offering last year. Brian Boland, the Facebook product marketing director who last week introduced Facebook’s plans for simplifying its advertising in coming months–partly in response to the shift to mobile computing–outlined how the company also has begun reinventing advertising for mobile users.

He said the social network realized it had to change its entire site to feel right on mobile devices. Coming up with new ad formats to fit mobile better was the biggest challenge. Facebook last year went with so-called native ads that appear right in line with posts on people’s news feeds, and that look quite similar to “organic” posts even though they’re marked as sponsored.

But some folks here, such as Brian Wong, cofounder and CEO of mobile app rewards network Kiip, thought advertising of any kind we would recognize as advertising doesn’t work on mobile devices. People are paying money for the paid versions of apps just to avoid ads, he pointed out.

Not surprisingly, Wong thinks marketing in mobile will turn on rewards, not anything that resembles interruptive ads. Kiip started with identifying gaming moments, he said, then moved into food and recipe moments and music moments. The idea is to take emotionally important moments in time and be there with achievements that people will engage with. If it sounds anti-advertising, consider that early this year, the company got an investment from Interpublic, one of the big ad holding companies. Even ad giants are realizing mobile may require a very different mindset.

OK, so once those moments are identified, then what? Kiip offers people rewards when they hit a moment, like finishing a to-do-list, but Kiip tries to do this serendipitously, not just providing something that people click to get a prize. Kiip has delivered 180 million rewards in the past three years. When someone claims a reward, marketers pay Kiip for those (cost per action, in other words).

Boland pushed back a little. He said it’s not that advertising is bad, it’s that bad advertising is bad. The nice surprise, he said, is that people don’t mind advertising on their mobile devices. The company tries to make sure the ad has value for the user, he said, such as a mobile install ad that highlights an app they might want. (One audience member said he in fact does not like mobile ads, especially on Facebook–to which Wong provided a thumbs up.)

One person in the audience wonder if advertisers be able to track our activities in the real world, such as through smartphones and wearable computers, to target people with ads. Your mailbox is one of the most targeted environments in the world, and results are measurable, Boland noted, so that kind of thing is hardly unprecedented.

The biggest key to mobile advertising taking off, though, may be to dispense with the idea that it has to be unique to small screens, contended Tim Cadogan, CEO of  OpenX . The digital ad platform is trying to work out what is the next generation of advertising that will work across all these screens. Let’s say I want to buy a backpack, he said. I go to REI. My phone knows I’m in the backpack area of REI, so Osprey offers me a 15% off coupon. That’s great. That’s advertising. Then you get home and get on your desktop computer, you get another “ad” that suggests trails to check out. Actually, it’s not really an ad, but they’ve done something to create a relationship.

We have to move past the technology, he said, and focus more on consumers. TV ad buyers don’t have to know what size of screen to run various ads, he noted, but that’s precisely what online ad buyers must do. That has to change so the focus can move to the actual consumers.

In other words, we may know mobile advertising has succeeded when we stop talking about it.http://www.forbes.com

Robert Hof

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