Applications are not media platforms

December 9, 2009

KF Lai is CEO of BuzzCity

By KF Lai

Let us talk mobile marketing. We might all agree that mobile advertising is a great way to advertise but a lot of brands have become side-tracked with a new craze – applications.

This new phenomenon may be an attractive alternative to traditional mobile advertising, but if ROI is a key driver, these applications are not the most profitable option.

Mobile marketing tools have the ability to reach a much wider audience as many more consumers possess a mobile phone rather than a computer, but it must be noted that an even fewer numbers have a smartphone.

With this in mind and more businesses turning to the mobile world to market effectively, we pose the question: Do they know all the facts?

New technology, but niche market
Currently, the hype surrounding the mobile advertising market has been hijacked by the applications market.

In addition to traditional banners, text links and videos, mobile applications appear to have won the popularity contest in mobile marketing.

Both the media and industry alike appear fuelled by the popularity of the likes of Apple’s App Store.

Therefore, you may be under the impression that to run a successful mobile marketing campaign, all you need to do is develop an application and then run some advertising on it.

This is fundamentally untrue – applications are not media platforms and they do not generate sufficient traffic to warrant advertisements.

Whilst the consumer world is engrossed in the latest application, it does not necessarily mean that the advertisements placed on these applications are being as effective as they should be.

Plus, the number of people with a smartphone is small, so applications as a mobile advertising tool are only reaching a niche market. The device is a major issue in mobile advertising, which is why the old-fashioned SMS is a much more effective tool.

An example from mobile ad network AdMob can back this up.

In May, AdMob served advertisements to 2,300 mobile applications. Fifty-four percent – that’s only just more than half – of these applications had fewer than 1,000 users.

Assuming that each user sees 10 ads per month and that the going ad rate is $1 to $2 per thousand views, the application is likely generating about $10 to $20 per month in ad revenue.

With these facts, advertising through applications does not live up to its hype – not when revenue is the objective anyway.

Stick to what works best
There is a growing misconception surrounding mobile applications. 

Applications are usually short-term, and unlike mobile Web sites, they do not generate sufficient traffic to warrant advertisements.

Furthermore, there may be increasing hype around applications, but are developers and carriers forgetting that smartphones are still owned by a minority group of consumers?

If you are serious about generating money from mobile advertising, we would suggest you stop being dazzled by the iPhone and start thinking realistically about which advertising tools will give you the best exposure with your audience. 

As consumers continue to use their mobile Internet, this is the best way to advertise. It is most effective, especially in emerging markets, and it is proven to be the most profitable. Let us stick to what we know works best.

KF Lai is CEO of BuzzCity, Singapore. Reach him at .