By rights, the massive market penetration of the cellphone should already have turned mobile advertising into one of the biggest forms of marketing in the world. There are already some 3.6 billion handsets in use worldwide, meaning that there are nearly half as many phones as there are people in the world. About 320 million of those phones are to be found in Africa.
By contrast, less than a quarter of the world's population (about 1.3 billion people) has Internet access and only 33 million of these people are to be found in Africa. A mere 1.6 billion people worldwide read newspapers.
What's more the vast number of cellphones in the hands of people around the world is already translating into impressive traffic on the mobile Internet.
During August 2008, more than 5.1 billion impressions were tracked worldwide on the mobile Internet, a number that will rise sharply as more users get their hands on newer phones that support high-speed data connectivity technologies such as HSDPA and 3G.
Despite those impressive numbers, mobile advertising is still a nascent market that faces a host of technical and business challenges. So what exactly is holding the mobile advertising market back?Technical challenges
The first technical challenge that mobile advertising pioneers face is fragmentation of the audience across disparate technologies. The mobile audience is spread across multiple platforms, with multiple sellers, multiple carrier networks, multiple devices, and multiple business models, all of which hinder consistency of execution.
In this highly fragmented landscape, it is difficult to identify a user, user session, browser, or device, which means that it can be challenging to deliver the right ad to the right user at the right time. Luckily, solutions to this problem are starting to emerge.
The next technical challenge in the mobile world revolves around tracking and measuring users and their activity. The state of mobile platforms makes it difficult to measure unique users against polluting traffic such as bots and spyders; to track international traffic versus South African traffic; and to measure advertising impressions in intermittently-connected content like games or downloaded audio.
Once again vendors are developing the solutions that will supply the data advertisers and agencies require to judge campaign success.Market challenges
The business model and market challenges that early advertisers face are as daunting as the technical obstacles. These challenges relate to the supply side of the business and the need to tread carefully around targeting ads and the usage of consumer data.
The supply constraints are a product of the relatively small universe of mobile media, coupled with a still-small audience for much of that content. But, time will solve this problem.
The second key market challenge that mobile advertisers face is to strike the right balance between the high targeting potential of mobile and respecting consumer privacy. Advertisers should support industry efforts around self-regulation and remain mindful of the rights that consumers have.
Targeting faces a challenge of scaling as well. Although carriers can provide demographic data, such information is not standardised across all of the carriers. Pioneering Publishers
Against this backdrop, what should publishers be doing to help move the market forward?
Well, one of the most important things they must do is to capitalise on the opportunity that mobile offers them to engage with their readers more effectively by delivering relevant content and interacting without any limitations of time and place.
They must recognise that the mobile space is an opportunity to increase their available inventory and hence their sales, and to provide a richer experiences for both their readers and advertisers.
What else can publishers do to take advantage of this new medium? They can:
- Drive user demand for mobile content
- Work towards greater standardisation of mobile ad formats and campaign measurements
- Push for better targeting capabilities. The evolution of the mobile ad market will help ensure that better targeting capabilities are offered to advertisers. In the interim, publishers should make use of tools like SMS surveys to learn more about their audiences to ensure that they can deliver more customised and relevant content and advertising to them.
Change, in terms of business models and technology innovations, is the greatest certainty in the world of mobile media.
Luckily, publishers and advertisers alike can use their experience with Web display advertising as a good foundation for their understanding of mobile display.
Just as those that jumped into the Web first are today reaping the rewards of their early move into the market, publishers and advertisers that start marketing via mobile today have a chance to position themselves at the forefront when mobile advertising goes mainstream.