Why it isnt easy being a mobile ad vendor
April 24, 2009
Jordan Greene is principal of mobile media at Mella Media
Are you serving over 1 billion mobile ad impressions per month? If so, you are only the fourth company this week that quoted that precise statistic to this agency audience that you are standing before.
The 30 seconds of discussion that follows you out the door will leave the buyers believing that the collective math is questionable, at best.
Now add in that they have also met with mobile marketing companies, text message ad platforms, app development firms, and several other subsets that each claim accolades and audacious, and seemingly unfounded, statistics.
But everyone shares one common declaration: they offer the way to the reach consumers' mobile phones.
For the first time mobile advertiser -- and even a seasoned buyer -- it is becoming increasingly difficult to determine what and who to trust.
As a mobile vendor, while your offering may be truly unique and valuable, that message is often not getting through to the would-be buyer.
Instead, you get bucketed together, along with everyone else who has walked through that door, and labeled, "mobile."
The real question for the current mobile company is how do you position yourself to not sound like the rest?
There are many contributing factors to this challenge, which began a few years ago. Several early mobile ad vendors were overly aggressive in their sales efforts, and made unsubstantiated offers of what they could bring to a brand.
Ultimately, many early adopters got burned.
As the spotlight shined brighter and brighter on the opportunities of what the mobile world could bring to advertising, literally hundreds of new and established companies jumped into the fold.
The sheer number made the industry seem as if it was experiencing exponential growth. In actuality, the ad spends were (and still are) not following in-step.
The result is a great deal of supply of advertising availabilities, across many subsets of the industry, with demand still relatively low.
To further complicate issues for buyers is the significant -- and often conflicting -- level of PR noise that mobile companies create.
For example, a mobile ad network widely promotes how it has become cashflow positive, while "quietly" raising another round of financing at the same valuation as its previous stage.
Another company extols the virtues of its sales approach and operations, while the poorly-kept secret circulates that it is replacing its CMO.
When all the information regarding the mobile environment is considered collectively, it becomes clearer why advertisers can be confused and weary of who to trust.
Now, mobile advertising saw significant growth over the past 18 months or so.
The multitude of ad options presented and the growth of adoption of the mobile web and functionality -- being led predominantly by the iPhone -- garnered the attention of more advertisers.
Words like "app" and "shortcode" became more prevalent in planning conversations. Even still, stating that 10 percent of the overall brands, products and services in the U.S. used mobile advertising as a component in their marketing plans would still be generous.
Of those brands, mobile is most often a small line item, if not a portion of an experimental or digital budget.
Consequently, mobile vendors good and bad, engage in heated battles to earn the crumbs falling off the table of executional budgets.
Companies feel proud to be asked merely to respond to an RFP. Margins move to negative at the drop of a hat just to "win" a piece of business. All along, the self-delusion cycle of many companies continues to ratchet up.
That is one very difficult environment to endure, and the truth is that many will not. A word that has surfaced recently at conferences and meetings is "consolidation." 2009 will likely see a handful of mergers, especially at ad networks which are spitting images of each other.
It is as likely that at least one seemingly high profile company will flat-out close its doors and disappear.
Overall though, mobile advertising will continue its growth, as consumers engage in more activities on their phones, and as more brands want access to them.
What mobile ad vendors need desperately is differentiation. The conversation needs to change so that sellers can change how they are perceived by their buying audience; they need to escape the generalized "mobile" bucket and be viewed for the unique value they can provide.
The companies with a bit of foresight will not wait until financial difficulty kicks in to realize that a change needs to be made.
This process is by no means easy, particularly with all the hype constantly swirling in the industry. The company first needs to confront its own self-delusions, and realize that its current approach is not creating the impact it forecasted or achieving the success it envisioned.
An objective third-party adviser can reveal the company's trees through its daily forest, and help define new strategies. This method can enable the company's management to rapidly and more precisely re-position its offerings, and stop delivering ineffective redundant messages to the market.
Instead, it can invigorate its existing -- and new -- sales channels, and derive significantly greater value.
Recently, an agency ad director shared a story where two mobile display ad networks, submitted virtually identical RFP responses.
Each one's so-called exclusive mobile sites were presented in the other's document.
The "cooperative" phone call to arrange the one-time opportunity nullified the potential benefit to each vendor when they both submitted it in their response document. From here, even a half-savvy buyer can drive the price down to below acceptable levels.
This is not the path to success, but rather, to the unemployment office.
Vendors need to change their stories and do more to show clients why they are of value. Differentiation is the essential first step.
Clarity is the next. In order to expand the overall market, vendors need to increase their ability to "speak buyer."
For the 90 percent of non-mobile-using brands to engage consumers through their phones, it is imperative that each understand how your mobile opportunity can provide significant impact to their existing business and marketing challenges.
In this competitive early landscape, contenders need to be nimble and strategic. Isn't that what you tell clients your platforms are anyway?
Jordan Greene is principal of mobile media at Mella Media, New York. Reach him at .
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Comments on "Why it isnít easy being a mobile ad vendor"
glauco tamega says:
April 25, 2009 at 5:33pm