July 15th, 2011
Mobile ad market gets more muscle
The mobile-ad market is scorching hot, in part because companies are getting more comfortable with using those ads to reach the third of American adults who own smartphones. That shift is coming despite consumer concerns about privacy and the amount of detailed data about themselves that they might be giving up.
This week, mobile-ad network Mojiva landed another $25 million in funding. DealNet, a new ad network for local merchants, debuted. And Target.com is pushing a major back-to-school mobile ad campaign via a Pandora application.
Money spent on mobile ads will soar nearly seven times, from an anticipated $3.3 billion this year to $20.6 billion in 2015, predicts Gartner.
Most of that revenue will come from the sale of ads for search and maps, which bodes well for companies like Google, which dominates in search, and check-in service Foursquare, a major player in mapping technology.
Until now, though, brands have been slow to “jump on” mobile ads despite dozens of mobile-ad networks, including Google acquisition AdMob, says Molly Garris, director of digital strategy at ad agency Leo Burnett.
The fate of mobile ads also rests largely on the acceptance of consumers, some of whom are becoming more confortable with the concept of viewing ads, such and movie trailers and auto promotions, from their phone. Others, however, find the ads an “annoyance” because they clutter small screens, get in the way of content and chew up bandwidth, says Kim Davidson, who works for a health-care vendor in Germany.
Still, corporations are showing more of an inclination to dabble in mobile ads before diving in, says Jonathan Weitz, a partner at IBB Consulting. He says 200 of the Fortune 500 companies ran mobile video campaigns in 2010, eight times the total in 2009.
Among them: Automakers like Ford, Toyota and Land Rover; and Bank of America, Garris says.
But for more brands to join the party, several things must change. Mobile ad networks don’t have the specific data available as in other forms of advertising research, says Toren Ajk, who is about to start a mobile marketing firm.
“It is reminiscent of Internet banner ads in the late 1990s before search, and granular data, came along,” Ajk says. “But there is a Big Brother-ish element now because check-in services” detail the actions of individuals on the go.
“I would argue this market is here and now,” says Walt Doyle, CEO of Where, the profitable check-in service that eBay acquired in April. “The opportunities, in terms of category, are across the board.”