I tweeted a quote from Eric Schmidt a few weeks ago
"while mobile is growing faster than desktop, [mobile] monetization has not been
I was quite pleased to see the Head of Google admitting that mobile monetisation (and by that he mostly means advertising) was not optimal, because I have known for some time that currently mobile advertising just does not work for the small mobile web-site owner, it only makes money for the aggregators such as Google and the small guy with less than 1 million hits per month is getting very small amounts of money. Even bigger players such as publishers and operators are usually very disappointed with the income they get from mobile advertising. Why is this? You just know that this is wrong, it does not feel right.
The reason is that the way advertising on online and in particular on mobile is done is not the right way. Today advertising has evolved from the way print and the broadcast media do advertising. You hear statements that targetted advertising is the answer but targetting means putting a music phone advert in an X-Factor (UK popular Saturday night TV program) ad-break – you know that young music lovers watch X-Factor so you hope they will buy your music phone. This works for limited number of cases, but not every advertising use case; in fact it’s not optimal; in fact it’s a million miles from being optimum. And if something is not optimum then its not earning enough money for anyone.
Search advertising might get closer to true targetted advertising because someone who is searching for something can be targetted for that precise thing. That is why Google has been financially successful in online advertising. But, by their very nature we do not use phones as much for search as we do for the fixed web. We use our phones more for viewing content not searching for it. A new model is needed for creating targetted advertising on mobile. This is why Google have resorted to creating their own phone with their own search button, but this is not the real answer for the user, advertiser or website owner; that is just Google’s answer. What we need is truely targetted advertising, where the targetting is based on what the user is reading, the time of day, their exact location and their history of being interested in similar adverts. Hopefully this will be obvious to those reading this. If an advert is truely relevant to a reader, it will no longer be viewed as an advert it could be viewed as a service providing useful info and where I can purchase this thing I am interested in. This is the future of advertising – fully targetted adverts which are fully optimised and will then make money for everyone. So why is no-one currently doing this? I think that people are only now waking up to these ideas and how significant they really are. Social sites such as Facebook also provide some targetting data and are toying with getting location information from users (in an inefficient way), but again it not opimal. Let’s say currently mobile advertising is only 5% efficient and that with full targetting it is possible to get to 80% efficiency (both made up numbers but hopefully you get the idea), there is a lot of improvement and money to be made in this area.