How Online Publishers Should Approach Mobile Ad Networks (With Caution)

Lets Not Make The Same Mistakes In Mobile That The Content Industries Did On The Web

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Mobile networks are different than the Internet. Mobile networks know who we are, and mobile networks know where we are. This is not something sinister. This is something that is absolutely necessary so that mobile networks can do the job they were created to do – reach us with phone calls and text message any place in the world that we happen to be.

Mobile networks also differ from the Internet in that they are privately owned (ie: Sprint, Verizon Communications, AT&T and T-Mobile). And because they are privately owned, the endpoints of the network are controlled by , and visible to, the network owners. We enter into contracts with these network owners and they supply us with devices that have a unique number. These unique numbers can be directly associated with individual people – you and I. These devices can also be located geographically by triangulation between cell towers, or with even greater precision by using the Global Positioning System.

On the Internet, in sharp contrast to mobile, anyone can buy a computer and connect it to the network without the involvement of our Internet Service Provider. And unlike mobile networks, the devices we choose to connect to the Internet betray little or nothing about who we are, or where we are.

As mobile networks have increased in speed and capacity, and feature phones have been obsolesced by Wi-Fi enabled smartphones, mobile has emerged as a powerful distribution channel for content publishers. In fact, because mobile now looks and feels so much like the Web, content publishers have quite naturally presumed that mobile will accommodate an advertising model that mimics the model on the Web.

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Yet demand for mobile advertising from premium brands is not keeping up with increased utilization of mobile websites and applications. As a result, many publishers are being tempted to turn their inventory over to mobile advertising networks for monetization.

A word of advice: Before we rush to embrace the introduction of ad networks in mobile, let's remember the lessons learned on the web.

Any website with a direct sales force can attest to the value destruction wrought by the intermediation of online advertising networks. Even worse than the collapse of pricing power, the early and widespread utilization of ad networks by online publishers facilitated the insertion of intermediaries into the online advertising ecosystem. Trading on user data, these opaque third parties now run rampant and have necessitated a self-regulatory regime, which, although robust and well intentioned, may still not be enough to keep Congress out of our business.

It is crucial that we not let history repeat itself in mobile. At a minimum, we must at the outset strive to replicate the self-regulatory framework that we've put in place for the web. Additionally, publishers should seize this moment to adopt a much more muscular policy toward companies trying to insert themselves between our audiences and our content on mobile platforms. If we knowingly choose to allow intermediaries to build businesses on our backs, let's take advantage of the fact that in these early days we still have the upper hand and demand some value in return.

It is easy to presume that the advertising model for mobile will mimic the model on the web. But before we default to that viewpoint, wouldn't it be wise to unleash our "inner Apple" and Think Different?

Let's envision a new model, where mobile isn't an isolated channel, planned and bought in a silo. Let's think of mobile as the connection point between a customer and the physical world, and make it the hub for cross-platform programs. And let's start now, while mobile advertising is still in its infancy. That way we could bypass all the intermediaries who have swamped the Web ecosystem in favor a simple direct connection between audience, media and advertiser, plugging all the data leakage holes before they are even drilled.

ABOUT THE AUTHOR
Michael Zimbalist is VP-research and development operations for The New York Times and a member of the board of the IAB's Mobile Marketing Center of Excellence. He tweets at twitter.com/zimbalist.
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