Mobile advertisers must take a leaf out of service sector’s book

The next few years will see wireless internet access outstripping fixed line, a change that will have massive implications for all forms of interactive marketing and advertising. This is partly because of the limitations of the access devices, particularly in terms of screen size, but also because of the opportunities mobile advertising offers.

There’s certainly growing interest in mobile advertising, with the recent figures published by the IAB and PricewaterhouseCoopers showing spending on the medium rising 32% during 2009, to £36.7m. Search accounted for the majority of the spend, growing 41% to £20.2m, while mobile display reached £17.4m for the year.

Some commentators were surprised that this growth came when marketing budgets were under intense pressure. As Jon Mew, head of mobile at the IAB said/ “The first thing you expect to be cut from ad budgets are experimental things such as mobile.” But what it really shows is that mobile has moved out of the realm of the optional to become something marketers are taking seriously.

Certainly the industry infrastructure is being developed. Google spent £467m buying mobile ad network AdMob, while Apple last month launched its own mobile ad platform, iAd. And the measurement of the medium took a huge step forward at the start of the year with the launch of Mobile Media Metrics by mobile operator trade body the GSMA and analytics firm ComScore.

But as the budgets increase and the building blocks of the mobile advertising industry are put in place, there is still a massive question to be answered about mobile marketing. What is it actually going to look like?

There are a number of debates around this question. The first is whether mobile apps represent the future, or whether they are merely an artefact of the current state of technology and the mobile web will ultimately come to dominate once more. The argument in favour of apps is that they represent the kind of branded utility that forward-thinking brands and agencies have been espousing on the fixed internet for many years.

According to this view, the proliferation of tools for filtering out advertising, from pop-up blockers to Sky+, means that to get through consumers’ defences, ads have to become so useful that they no longer look like advertising at all. That sort of ad would look a lot like a branded app, available free or even paid-for, that delivers a service from an advertiser.

The argument against is that apps can only offer a cut-down version of the brand experience and that as the screen sizes of handsets increase and browsers improve, users will move back to the richness of web pages, leaving advertisers to find formats that work within them.

The other aspect of mobile advertising that has still to be resolved is the importance of location. Nearly ten years ago location information was being touted as the great benefit of mobile, in the shape of the ability to promote offers to people passing your physical outlet via their phone. The idea resurfaced in the early days of Bluetooth and is once again gaining respectability, seemingly in defiance of the other truth universally acknowledged about mobile, that it is the most personal of communications devices and therefore holds the most potential for irritating users.

Importantly though, location-based services are starting to emerge that are more than just the digital equivalent of someone handing out leaflets outside a store. Location-based services and games platforms such as Foursquare are gaining popularity, suggesting potential sponsorship opportunities for brands.

But these applications and services are in their infancy, and it’s hard not to escape the feeling that the real future of mobile advertising remains to be discovered. The history of the internet is littered with commercial models imported from other media, from the banner ad to the pre-roll, but the models that have proved most effective are those that have used the unique properties of the web to create something entirely new. It’s no surprise that search dominates online advertising spending, since it’s impossible to do in any other medium.

So one possible future for mobile advertising lies in bringing together not just location information, but also the ubiquity of the camera phone.

Although most of the applications of augmented reality we’ve seen so far seem like little more than engaging novelties, developing technology to allow overlay physical locations with data viewable on a mobile suggests new mechanisms for pull marketing. An often-quoted example is the one where a building is tagged with information that can be discovered by pointing a cameraphone at it, allowing the viewer to see what’s in the building. Once again, it’s advertising-as-service, it’s unique to the medium and it’s a lot more compelling than a banner shrunk to fit a mobile screen.