Mobile advertising has been a hot topic for a long time, but hasn’t really taken off. Prices and revenues remain low despite the fact that consumption of mobile content is at an all time high. But the two giants Google and Facebook now are willing to get things moving faster.
Recently, Google CFO Patrick Pichette, speaking at the Bank of America Merrill Lynch Technology Conference in San Francisco, declared “I am convinced that the margins on mobile have to be higher than on desktop. […] The premise that mobile has to be a lower CPC [cost per click] because today it’s a lower CPC doesn’t make sense.”
The key to the success of mobile advertising: Location
The revolution brought by smartphone is bringing radical changes in the way marketers can address end users. Mobile technologies bring a new dimension to the data that are used to better understand customers: their location.
Advertisers and marketers are looking for a means to differentiate their campaigns on mobile – and localization offers it by allowing them to truly pinpoint their target audience in real-time and manage their campaigns on-the-fly.
In a recent interview with Bloomberg, Carolyn Everson, Facebook’s vice president of global marketing solutions, said that the world largest social network is actively working on a location-based mobile-advertising product that will allow companies to target users with real-time data showing their whereabouts. “Phones can be location-specific so you can start to imagine what the product evolution might look like over time, particularly for retailers. […] We’ve had offers being tested over the last couple of months.”
In a recent Insight report, JWire confirmed that the potential of revenue from mobile advertising is increasing, thanks to a shift in the consumer’s behavior. Contrary to popular belief, C-level executives and small business owners have become more tech savvy as they embrace location-based apps and find themselves more in tune with location than ever before. For example, 70 percent of C-level executives use location-based apps on a weekly basis or more daily. Likewise, 73 percent of small business owners are more apt to use location-based apps daily (57 percent) or on a weekly basis (16 percent).
No one now questions the fact that the future of mobile advertising is location based. However, the role of each actor of the market is still to be decided. Mobile operators, mobile application editors and hardware manufacturers all have a hand in locating their end users. Who will be able to monetize this precious data remains to be decided.