Mobile Advertising: Location, Location, Location and Relevance
Last time out, I pointed out the major failings of mobile advertising. Now it’s time to lay out what I see as the way for mobile advertising to be successful.
In order to be successful, mobile advertising has to accommodate the limitations of mobile devices. The screen is small. Data delivery can be slow. Typing is slow and often error-prone. And then there’s how people use the devices. They can be away from computers, have limited attention span, and be in a hurry.
But there is one thing that is almost known about the mobile user now, and that’s location. And it’s often information regarding location that the mobile user is looking for. Directions. Mass transit schedules. A store that sells something. A restaurant for dinner. It’s not just that the location is known – that can be determined with a desktop computer – it’s that the location is important to what the mobile user is doing with the phone.
I use a terrific “application,” it’s actually a web site that uses html5 to access the user’s location, and it gives me real-time data on the bus or trolley I’m 
waiting for in San Francisco. The interesting thing about this is that it knows where I am and where I am headed. It’s the ideal advertising opportunity and it isn’t being used at all. If it’s 5PM and I’m headed downtown on a Saturday, why not advertise for restaurants along the way.
This is just one example, a wealth of applications depend on location – Yelp and Gas Buddy for example – yet don’t appear to be turning this into advertising. It’s the most valuable information the phone gives about the user, and publishers don’t seem to get this yet.
And then there’s relevance. What has made web advertising so effective is the connection to search and to the web pages on which advertising is delivered. Many of the rotating non-relevant ads have disappeared, but not on mobile. Pandora knows where I am and a lot about me through my musical tastes – why would I (or anyone else using Pandora) click on an ad for match.com? I realize they are filling inventory, but the CPM has to be low and all it does is annoy. The benefit is negative to Pandora, especially as there are other music services available.
That’s why people searching for something is so important – I want information, and if it can given to me in a way that incorporates advertising, I don’t care. I use google on my phone at least a dozen times a day. I use Yelp to search for businesses, mostly restaurants, whenever I am out. I use Gas Buddy to find gas if I’m driving. I use google maps to find a location I want to visit. These are all opportunities to hit me up with advertising, and I have no problem if it helps with what I am looking for.
This points to what advertisers and publishers need to do. Advertisers need to make the advertising relevant to what they user is doing and where they are. For sites with logins, advertisers usually have more information, if the user is logged in. Using this valuable data will make ads more likely to be clicked, or to leave an impression, and far less likely to annoy the user.
Another way the information can be used besides pure ads is couponing. If I’m in the Safeway parking lot and I’m on the phone, why not push a coupon “book.” Groupon’s app puts daily deals in front of me, but that doesn’t really help, and they’re not relevant, as all the deals for nail salons tell me. If I’m at the ballpark, a coupon for a restaurant after the game would be welcome. If it’s 11PM and Saturday night and I’m in an area with lots of clubs, a coupon for drinks at one of the clubs might entice me. None of this is happening, from what I’ve seen.
I have ignored, until now in this post, cross-merchandising of apps. From what I have seen, this works, but it’s fairly specific and doesn’t necessarily generate revenue. If I’m playing Star Arcade’s Diamonds Paradise and at the end of the game get at ad for their Jelly Wars game, there’s a good chance I 
will take a look, if not the first time, then the second or third time I see the ad.
And this leads to my last point. There is a naive perception that advertising is different on the web, that getting people to click is the primary objective. I have heard this from Web 2.0-ers, even ones who talk about branding constantly. It’s still the case that, whether viral, on the computer, on the phone, or just out and about, that advertising requires multiple hits for broad based effectiveness. It takes a campaign for brands to be coupled to their value. While I found some of the apps on my phone, others, like Evernote, required hearing about the product enough times to realize what its value would be. When not searching for a specific product, service, or business, advertising still has to hit the user until it’s absorbed.
Summarizing, the recommendations to advertisers:
1) Use the location information, it is incredibly valuable;
2) Use relevance and advertise what someone is looking for;
3) Use couponing and alerts to increase usage;
4) Advertise over and over for branding.
I am optimistic that mobile advertising will become useful instead of annoying. Apps and websites will become monetized more easily when this happens and users will be happier.
