Going local with mobile advertising

The mobile advertising market is growing rapidly, presenting fresh challenges for any brands wishing to get their messages in front of this important new target audience.

According to recent figures from the Internet Advertising Bureau (IAB), the trade body for digital marketing, the total spend on mobile phone advertising in 2009 rocketed by 32 percent year-on-year to a new high of £37.6 million – and all that despite an overall contraction in the advertising sector in 2009.

Two of the biggest names driving this hike in interest in mobile advertising are Apple and Google. Apple launched iAd, its mobile advertising platform, following the acquisition of Quattro Wireless for $275 million. Google is similarly bullish, investing $750 million in its own AdMob. So that’s more than $1 billion investment by these two giants of the marketplace, and a pretty good indicator to potential advertisers that this isn’t a fleeting opportunity.

Before joining the mobile advertising bandwagon, potential advertisers need to try to understand mobile better as a platform. If possible they should gauge the value of applications by tracking their usage. Before the iPad was launched, a firm called Flurry Analytics – a developer of a leading smartphone application analytics and monetization platform used by more than 30,000 applications across iOS, Android, Blackberry and J2ME – enabled developers to include code in their iPhone apps to track usage. With this help brands could breakdown exactly what users were doing within their apps and how often. A bit like Google Analytics on the desktop, this data wasn’t personally identifiable but was very useful as guidance.

Unfortunately for Flurry and app developers alike, Flurry’s analytics were blamed by Apple CEO Steve Jobs for ‘outing’ IDs of new tablet devices on the Apple campus that turned out to be the secret iPad in testing. Jobs said at the time: “We learned some company called Flurry had data on devices that we were using on our campus. It was getting developers to put software in their apps that sent info back to this company! So we went through the roof. It’s violating our privacy policies! So now we’re only going to allow analytics that don’t give our device info.”

Apple felt obliged to change its terms and conditions for tracking software. Developers must now sign up to stringent restrictions of third-party tracking libraries unless tracking is explicitly obvious to end users. What does this really mean though? Most websites already use non-personal tracking. Are our mobile phones considered to be more personal devices, with more questions raised over tracking of information on them, especially any locality information?

If rich information capture from mobile devices was permitted, either specifically through raw cell tower information or by other boundaries, advertising networks could undoubtedly put it to good use. The Apple iAd platform can already enable developers to put targeted interactive ads into apps, that with permission can look through iTunes histories and study behavioural information to enable tighter targeting. Google’s own ad model can employ Google maps to present ads to users depending on their location. Theoretically all of this would be ‘opt-in’ from a customer point of view, but it isn’t impossible for permissions to be bound up in general terms and conditions. Regardless, Apple currently believes its apps should be explicit about intentions to track behavioural information, using location-based services and permitting targeted advertising.

2010 is already the year of mobile, and that’s largely because mobile manufacturers and service providers are getting so much better at understanding what consumers really want. Debates will certainly be raised over what is good for them – do we all want targeted business ads while walking city streets, and shopping vouchers sent to us as we walk through the doors of a shop? Arguably the offline world is moving this way anyway, thanks to pervasive loyalty and travel cards. Even Facebook has been in hot water for targeting ads based on profiles at one time, but it’s obvious to most that this is a trend on the cusp of acceptance by many, so long as an acceptable balance can be struck between benefits and privacy.

This article was writtern as part of the Foviance July/August Newsletter