Mobile tops the list of tech and media topics that have gained the marketplace’s attention and investment over the past few years. This focus is being sustained by hardware innovation, rising smartphone penetration and the resulting mobile Web and app usage.
A key part of this discussion is monetization. Though paid apps have succeeded in some areas such as games or niche vertical interest, ad support is a more broadly fitting choice for lots of app developers and publishers, due to mobile users’ high commercial intent.
But a challenge has arisen in the slower than expected advertiser adoption. Put another way, advertiser adoption hasn’t caught up with mobile usage. Mobile holds a 12 percent share of U.S. consumers’ media time, but only a 3 percent share of ad revenue.
The good news is that a few factors will counter this supply/demand imbalance that’s mitigating sell-side monetization. For one, mobile’s high engagement relative to other ad supported media will create premium inventory that boosts advertiser demand and rates.
One of the main sources of this premium lift will be location targeted ads. Their value will be a function of congruence with user intent, such as 50 percent of Google mobile searches that seek local information. Location targeted ad performance will also drive this.
Such performance deltas for mobile ads that carry various flavors of location relevance are already evident from data shared by mobile ad companies cited in this report. Advertiser demand will follow in an inevitable process of market evolution towards higher ROI.
Mobile local campaign tactics won’t just involve where the ads show up and what they contain, but how they’re measured. A feedback loop of ad effectiveness drives towards one of the most important areas of mobile ad innovation in the coming years: Attribution.
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