If the industry hasn’t cracked the mobile advertising code after five years of energetic and skillful work it’s because there is no code to crack. Together, the small screen, the different attention modes, the growing concerns about privacy create an insurmountable obstacle.
The “$20B Opportunity” is a mirage.
Excessively negative, but directionally correct. What pass for ads elsewhere in the digital world are going to have to change radically. The ‘native’ advertising for smartphone app (or maybe app stores) hasn’t been figured out yet.
It will be figured out, maybe even by Facebook, and it will grow to make that $20B look trivial in a decade or so.
JLG (and pretty much every other reaction I’ve read) neglects to mention the native/contextual ad model that’s currently dominating mobile advertising: cost-per-install (CPI). Irrespective of whether or not brand dollars are effectively onboarded onto mobile, the DR channel for app installs is growing rapidly with no abatement in sight.
Piggy-backing on top of CPI is the engine that fuels this advertising model in mobile: in-app purchase, especially in the games space. There is a willingness among consumers of mobile apps to purchase virtual items (goods, premium features, content) that, anecdotally at least, seems more seamless than similar behavior on the traditional web.
I think JLG is right to be skeptical of major brand dollars shifting to mobile to match time spent because most mobile advertising formats aside from CPI are like display on the web, but smaller in size (and more annoying to boot). To add to this, the ad tech plumbing in mobile makes buying traditional display seem like print. Still, mobile advertising might not need traditional advertisers to succeed in the near term. The voracious appetite smartphone users have for mobile apps paired with their willingness to buy things in-app means that a new and very healthy advertising market is emerging that is supplementary to branding. For the time-being at least, this should fuel growth and innovation while the rest of the ad world figures out how to optimally onboard that $20 billion in ad spend that “should” be on mobile devices.