This is the key message in my debut column at RCR Wireless Week as a new addition to the Analyst Angle, a regular feature where leading analysts give their outlook on the hot topics in the wireless industry, from carriers to content to handsets to infrastructure. This month I have chosen to examine the emerging mobile advertising ecosystem, and the advance of mobile advertising platforms that cleverly bring together a mix of companies to reduce channel fragmentation and provide the planning and profiling capabilities that will allow advertisers to harness mobile to deliver the right ad to the right user and reduce wastage generated by blanket campaigns. Gigafone was the first out of the gates, but I am sure there will be more to follow.
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Is mobile advertising broken? Or is it just early days?
The jury is still out on that one. But there is no ignoring the gap between the amount of effort companies invest in mobile advertising campaigns and the actual results they produce.
Granted, some well-executed (translated: targeted) campaigns report an average response rate of 25%, (I'm thinking here of Blyk, the world's first ad-funded MVNO turned media company that has purposely focused on the 16-24 year-old demographic, one that has expressed a keen interest in hearing what brands such as Coca-Cola and L'Oreal have to say). But these are the exception to the rule.
Do the math and click-through rates (CTRs) on mobile ads are generally between 1-3%. The good news: It's more than the 0.05% CTRs brands get from online banner campaigns. The bad news: It still represents a 97-99% fail rate. Would you build a business model on a medium that fails to satisfy over 90% of customers? Not likely.
February 27, 2009
