A couple years back I had a conversation with my accountant. He told me "money is dangerous because success can hide failure."
This is a good way to describe the conundrum now facing the mobile ad industry. While declarations of growth are abundant, the reality is that most mobile advertising is failing.
Large percentage rates of growth look great, but that 's coming off a tiny base. The truth is ad dollars are dripping—not flooding—into the mobile, even though nearly 60% of U.S. mobile subscribers now carry a smartphone. This reason for this is not overly cautious marketers, however. It's because the mobile platform simply isn't all it's cracked up to be.
Yes, a handful of mobile vendors are beginning to see a handful of six-figure deals. But in a year when the market cap of a mobile ad network like Millennial Media has surpassed the entire mobile ad market you know you're looking at an industry built on hype .
Companies are doing amazing things with big data. 4info has collected data on 330 million devices across 97 million households in the United States, knitting together a road map of demography, geography and behavior that equips advertisers with the quick-strike capability of a U.S. drone.
But all this targeting is useless if we can't take advantage of it.
Mobile advertising vendors will roll out jaw-dropping presentations showing amazing "app-like experiences" replete with digital awesomeness. Auto brands, you can take a virtual test -drive to an astonishing new level, they promise.
But it's completely meaningless when the fulcrum point between big data and big experience is a 120x20 pixel banner ad vying to interrupt your game of Paper Toss.
Bring that up and those vendors will laud comparatively higher click- through-rates for mobile versus those of the traditional web. They'll likely forget to mention the recent report by Goldspot Media showing that 38% of all mobile clicks are due to fat, clumsy thumbs.
At the end of the day, this kind of interruption-based advertising is never going to be a great success. People simply don't want these ads on their phones.
Of course, there are bright spots.