Will Location Targeting ‘Save’ Mobile Advertising?

Over at Street Fight, my monthly column explores how mobile ads — despite lots of excitement and media attention — are still undervalued in terms of ad rates. This is good for advertisers that want to experiment at early stages … but not so much for publishers.

A few things could turn this trend around including an acceleration in advertiser demand/adoption. Second, we’ll see sources of premium ad inventory. Those include things like Facebook’s mobile Sponsored Stories, but it will also include most notably, location targeted ads.

This is all very timely, with Apple’s launch of its new slick mapping front end. That will have lots of implications for mobile local content delivery and advertising, given Apple’s reach and influence (not to mention ownership of the hardware/user touch point).

The column takes a deeper dive and a preview is below with a link to the full post. Happy reading.

The latest tech topic du jour seems to be Facebook’s reach to justify a $77 billion market cap — down from its $82 billion IPO valuation.

The social network’s migration to mobile — to the tune of half a billion monthly active users — is the biggest source of investor concern. As users spend more time accessing the service from a touchpoint that is under-monetized, its average revenue per user (ARPU), goes down.

Yelp faces a similar situation: about 10 percent of its monthly uniques access the site via mobile. But they represent a disproportionately large 40 percent of overall search volume. Yelp also told me that it generates a phone call or directions to local businesses via mobile every second.

These numbers say a lot about how engaged mobile users are, and indicates the real the revenue opportunity once Yelp more comprehensively flips the monetization switch. This is especially relevant given “lower funnel” actions like calls and directions — tangible conversions that typically resonate with local businesses.

But perhaps equal to the opportunity for mobile monetization is its necessity. Similar to Facebook’s challenge, as more usage flocks to a distribution point that’s under-monetized, ARPU presumably goes down.

Even companies that are beginning to monetize mobile aren’t seeing ad revenue comparable to desktop (except Twitter). Mary Meeker’s semi-annual data dump during last month’s D10 conference confirmed that mobile eCPMs are 5x lower than the desktop.

Read the rest.

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