Are Mobile Ads Relevant?

Podcast: Play in new window

During the past few days, I’ve viewed dozens of banner ads appearing at the bottom of my Nexus S’ screen–many attractive, but most irrelevant, repetitious and spammy.

For my ad-hoc tests, I used Republic News’ excellent app letting users choose topics by subject in a tag cloud. The mobile ads, however, kept rotating from Groupon, a Republic News reader survey, followed by more Groupon ads. While viewing the ads and content, I kept asking myself: ”Why are you showing me the same ads when I’m not responding? Do you hope I might start using coupons and click or are you filling inventory?”

My second test involved the mobile app Tweetcaster. Today I received an alert, usually indicating a re-tweet or direct message. This time, though, the screen was stuck on a webpage showing my bio and following/follower stats with rolling banner ads at the bottom for glass, tile and carpet, Audible.com, credit counseling, bail bonds and sporting goods stores. The ads changed quickly by shortest to longest distance to a store, as if I were using map software to find the nearest Starbucks.

Above the ad, I read: “That’s you…2,198 Tweets.” So I concluded that sending lots of tweets qualifies me for behavioral targeting. But the Google/Admob mobile ads were not relevant to my needs or wants.

My conclusion: Republic News doesn’t have enough mobile advertisers and Admob is throwing mud against the wall hoping some will stick, despite my lack of response. In other words, the customer doesn’t come first.

The “Pandora” Syndrome

Clearly, all is not well in mobile advertising, even at Pandora Internet Radio. eMarketer recently forecasted only 2014 U.S. mobile ad spend of $2.5B, a pittance compared to online at $26B. $2.5 billion, by the way, is what Facebook spent on advertising in 2010.

Pandora Internet Radio’s inability to fill ad inventory is ample proof. The company’s CEO recently announced its mobile ad challenge. If Pandora, the darling of Wall Street, can’t fill inventory, how will other online publishers or entertainment services fare? Not well if eMarketer’s forecast is correct. Even Groupon, which is filing for a $750 million IPO, lost $413M in 2010.

Relevant Mobile Ads Critical to Growth

Despite the low ad revenues, however, it’s the relevancy of mobile ads that’s critical to the future of mobile advertising. Just as online slowly developed search ad strategies and a pricing system based on click-through rates, mobile must demonstrate its advertising advantages to win its rightful share of the ad pie. Only then will revenues for mobile ads rise.

Tagged as: admob, google, groupon, mobile ad spend