The Challenges of Monetising Mobile Users

Louise Gordon-Jones in Advertising

in Advertising

Rapid advances in technology are without a doubt shaping the advertising world and social media platforms are leading the way with an innovative focus on programmatic and native advertising. The radio made it possible for businesses to talk about their products; television made it possible for companies to showcase these products. Yet, these no longer represent adequate advertising mediums for businesses, which have been forced to adapt to remain competitive in a society increasingly shaped and driven by the ease of instant internet access. Online consumerism drives the sale of goods and services, and as businesses aim to maximize profits, they become increasingly concerned with targeted advertising and positive user experience. Infiltrating the smartphone market through innovative digital advertising models is a continuously evolving challenge for businesses, as they look to monetise users, who are reported to have already broken the 1.6 billion barrier.

Exploiting widespread smartphone usage

According to Millward Brown’s AdReaction study, mobile is the largest single-screen medium around the world, and in the near future – 2016 according to eMarketer – mobile advertising spend will eclipse online advertising spend. Monetising mobile users has therefore become a priority, and social media platforms are acting fast to grasp the lucrative opportunities in this market. The commitment from users to mobile has meant that programmatic mobile advertising has had to evolve quickly to keep up. Mobile advertising has overcome the adversity it historically faced and has grown into an effective platform which offer brands the opportunity to connect to mobile users in real time. Industry experts previously pointed to factors such as absence of cookies, lower user attention, multiple apps, multiple screens and multiple operating systems as the reasons which held back development in this area. With advances in ways to utilise the raw data which mobile phones can produce, programmatic buying in this area has grown strength by strength. Mobile DSPs can now track models, operating systems and screen size amongst other variables. There is a breadth of premium inventory available across mobile, with many of the most widely used apps owned by the likes of Facebook and Google who are intent (and invested) on making this way of trading successful. Evidence of this confidence in programmatic buying for mobile is evidenced by Twitter’s acquisitions in recent years. Twitter acquired Namo Media in 2014 which specialises in native advertising with a particular focus on mobile ads. This bolstered the acquisition by Twitter of MoPub, the mobile focussed ad exchange, in 2013 with MoPub now integrating Nano Media into their platform.

A paradigm shift

Twitter’s acquisitions also recognise that digital advertising models are changing – from buying media to buying audiences. Programmatic advertising enables brands to pinpoint audiences and deliver the right message, at the right time, in the right place. As a result, media wastage is significantly reduced, buying efficiency improved and overall campaign effectiveness boosted. With confidence that this can now be achieved the focus is also on striking the perfect balance between the prominence of each advert and not diminishing user experience. Twitter has clearly recognised the power of content that integrates within the site, with less focus on banner ads and more on promotional tweets and accounts. The mobile is probably the most personal screen the consumer owns, brands needs to be careful not to intrude, as psychologist Simon Hampton said during London Tech Week last year, on what is effectively the equivalent of Samuel Pepys’ diary in the modern age.

Implications for modern advertising exchange platforms

Firstly, the enormous growth potential in mobile advertising will see pioneering advertising exchanges, such as MoPub, transform into ideal acquisition targets for tech giants, who not only see internal potential but but also external revenues. Secondly, the immersion of native ads is likely to draw the attention of regulators, as the line between content and paid-for advertisements becomes blurred. The UK Internet Advertising Bureau has formed the Content and Native Council whole role will be to produce strong guidance for advertisers and publishers when deploying native and content-based advertising. Similarly, voluntary self-regulating advertising bodies have already emerged in Australia and the U.S to police this issue and address consumer complaints.   Targeted advertising techniques have also prompted concerns over privacy. Nonetheless, Gurbaksh Chahal, CEO of digital advertising platform RadiumOne, was quick to dispel such fears. He claims that the targeting technologies used are “entirely opt-in and private”. He adds that “the targeting options are based on anonymous data that is collected over time”. Yet, as digital advertising companies compete for ads, via which they generate income, on the basis of the quality of information they possess about users, fears have emerged of a race to the bottom in privacy standards. This will remain a concern as long as trade in personal data continues to be a driver of the digital advertising industry. Schlickum, CEO of Xaxis the data management platform, is confident that what is needed is a proactive approach, educating consumers on how their data is used within the realms of the law.

The Challenges of Monetising Mobile Users was last modified: February 2nd, 2015 by Louise Gordon-Jones