Going the Distance Via Mobile

December 1, 2010 § Leave a comment

“We’re on the brink of a seller’s market for the first time in a decade.”

At a time when analysts and researchers alike are trying to resuscitate the economy by boosting confidence, romanticism abounds. But the statement above, the opening words of the PubMatic Ad Revenue 2010 Report, is not one of them.

The report summarizes 5 trends that publishers should be leveraging to increase revenue next year, among which I like two of them, going mobile and monetizing video.

Pandora radio is a successful case in point. By May this year, more than half of Pandora hours streamed were done so via mobile. This seems quite intuitive since people like to listen to music while on the go is anything but new discovery. However, people used to do this via ipod which does not have a radio feature. By replacing paid music on ipod with free and customized music on mobile enables Pandora to monetize its services with ads.

With apps come more engaging advertising units. Pandora for example incorporates banner ads, display ads, audio ads as well as video ads and makes sure that the impression is viewed. Also with rich media platform, users will be directed to videos, directions, Apps, iTunes store, webpages or even an email draft page.

Better audience retargeting including hyper local functions makes mobile ads more efficient.

According to the PubMatic report, “Location-aware phones, which most smartphones are, allow marketers to target locally in ways that cannot be done with online advertising including click-to-call campaigns for local businesses and coupon redemption campaigns. Last year Starbucks ran a mobile redemption campaign with 60% redemption rate—a rate that cannot be matched with online advertising.”

Location is the buzzword for 2010. With early start-ups exploiting this untouched lad and partner with big companies in large scale such as Shopkick and Foursquare, the business model is not sophisticated enough to prevent copycats focusing on local levels.

Pandora says it has utilized user-supplied data such as zip codes to target consumers who is more likely to have a particular interest in the ad displayed. While it is moving in the right direction and it is unlikely for Pandora to incorporate check-in features, I still think this could be done more subtly. The zip codes of address is too unreliable information to locate users. People move all the time.


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