Embarking on a mobile ad buy is diving into a dark, deep sea crammed full of startups you've likely never heard of : Celtra, Mojiva, Medialets, inMobi, just to name a few. It's brimming with a lot of little companies -- and a couple of big stakeholders like Apple and Google -- scrambling to build the infrastructure to make advertising work in a medium that some have said will be bigger than TV.
Why the Pipes Are Broken in Mobile Advertising

Someday maybe, but right now mobile is behind -- about $59 billion behind TV, in fact. Despite all the excitement around smartphones, there still aren't the standard tools mobile advertising will need to even hope to reach the $60 billion in ad spending TV pulled in last year, according to Kantar Media. This year, mobile ad spending in messaging, display ads, video and search is expected to top $1 billion in the U.S. for the very first time, according eMarketer.
"There are challenges at scale," said Brandon Berger, chief digital officer for Ogilvy Worldwide. "Buying $30 million worth of mobile media is going to be daunting."
There are 234 million Americans older than 13 using mobile devices at ComScore's last count. Those consumers, of course, are all using different devices: some carry tablets, others iPhones, Android phones and non-internet feature phones. Add in that advertisers and their agencies don't have standard means to create or measure mobile ads across a number of apps, sites or devices, it sure will be tough for the category to go from $1 billion to even $10 billion.
"The real pain point [in mobile advertising] is removing the friction in spending the way that brands want to spend," said Eric Litman, chairman-CEO for Medialets, a mobile rich-media company. Marketers report that device fragmentation and lack of standardized metrics and ad formats are among mobile advertising's biggest challenges, according to the Interactive Advertising Bureau's recent survey of 300 U.S. marketers that use mobile advertising.
To date, pervasive systems in serving, measuring and creating mobile displays ads, especially souped up rich media-ads, are largely missing. There are companies offering these services, which have helped online display and rich-media advertising scale up to $8 billion in U.S. spending in recent years, but there are still too many. While Medialets provides the technology and tracking for rich mobile ads with lots of bells and whistles, but so does Crisp, Celtra, Apple's iAd and Google's Admob. The problem: too many isolated solutions that work for specific ad networks, apps or devices, not enough connective tissue to make it possible to make one ad, with one means for measurement, that can run in multiple places.
"Consolidation hasn't yet happened yet," said Martin Lange, global head of mobile for OgilvyOne. "With mobile, it's a lot of startups knocking on our door and whether they have 150 or 10 people they've all got something valid."
"I've probably had four or five meetings today with vendors and startups that are trying to address all of the scaling and operational challenges that we have," said Paul Gelb, Razorfish mobile practice lead.
There's also no go-to third-party source to find the big audiences in apps or mobile websites, like a ComScore or Nielsen for mobile. (Both companies are in the process of building products to measure mobile.) And there are no all-encompassing ad-servers that work on all mobile properties or ad networks so agencies can keep track of campaigns in one standard way.
Google, which owns DoubleClick for advertisers (a standard online for tags that let agencies know whether all ads contracted actually ran and if consumers clicked on them), is extending that service to measure mobile campaigns. But that 's still different from tracking with Apple's iAd. Apple does accept third-party tracking, but only to count ads served, not for the clicks or interaction rates, which are both widespread metrics online.
Add in the fact that ad creative can't always port from the major mobile ad networks to publishers' individual mobile sites and apps. Apple's super-slick iAds can't be used on other networks or in publishers' apps, even though the advertiser sometimes has to pay to have those ads produced. If advertisers want to build rich media ads on the three biggest networks Google, Apple and Millennial -- the best places to buy mobile ads at scale today -- they have to build different ads for each.
"If you're an advertiser and you're looking to run a rich-media campaign like iAd on just [Apple] devices, you're already cutting out half the market," said Tom Limongello, VP-marketing for yet another mobile rich-media company, Crisp Wireless.
"With these creative challenges, advertisers with smaller budgets are forced to pick only one network or publisher. Conversely, big mobile ad buys spread across many apps or networks are tough to measure in one holistic picture, said Razorfish's Mr. Gelb.
These challenges are, to some degree, history repeating itself. Just years ago, the infrastructure that now powers online banner ads sprung up from a fragmented field. From a wide pool, some companies were purchased, others perished and a manageable stable of providers now remain to run the pipes that make online ads an increasingly bigger business. In following that formula, however, mobile may suffer.
"We're a little bit held prisoner; a lot of people saw what happened online and are trying to race to the winner's circle and are making claims that they have the right solutions for mobile," said David Gwozdz, CEO of mobile ad-server and network Mojiva. That's because entrepreneurs are very aware of the potential for extremely lucrative sales of ad tech companies -- in 2007, for example, Google bought DoubleClick for $3 billion in cash.
With increasingly more attention, mobile advertising's infrastructural challenges will likely be worked out in time. Trade groups like the IAB and Mobile Marketing Association are circling the wagons to set standards in ad sizes, placement and functionality with the help of major mobile ad networks and publishers such as The Weather Channel and CNN. However, Apple, which owned nearly 19% of the U.S. mobile display market last year, according to research firm IDC, is not active in setting industry standards, said Michael Becker, MMA's managing director for North America.
All that said, the explosive growth in smart phonesales and lessons learned from internet ads will likely hasten things along. "What took 10 years to really refine on desktop, mobile is pulling together in a year," Mahi de Silva, CEO of another mobile-ad company, Admarvel.