Mobile advertising and ads in apps

If you follow the news in mobile, you might have noticed mobile advertising is really hot (surprise ;-) Google has launched mobile ads last week, when Nokia bought a mobile advertising company; so did AOL a few months ago.

Why is mobile advertising hot, all of a sudden? The answer, in my opinion, is in the continuous drop of data plans prices and everything happening around what I call mobile 2.0. In a nutshell, service providers and portal have the opportunity to reach consumers directly, for the first time in history. They are going around the carriers and mobile advertising is the way to do it because it gives them reach (for free) and a potentially huge return.

You might ask: any prediction on what will work with mobile advertising? Sure, just because you asked ;-)

First of all, web-based mobile advertising is destined to fail (in my opinion, until proven wrong...). The browsing experience on a mobile phone is sub-par. There is no mouse and the screen is too small. The iPhone sports the ultimate browser and the largest screen, you can't do better than that: however, browsing on the iPhone still sucks. I mean, it is a nice-to-have feature in emergencies, when you do not have a PC or laptop close-by. However, it is not where you will spend most of your time on a phone. On top of it, there is just no room for advertising, to make it not-annoying for users. Annoying is BAD in advertising. Mobile ads on browsers will be annoying and intrusive. They simply won't work.

What will work, then?

I believe the best application to drive ads on a mobile phone is the maps application. An app you need and want to have on a device. In particular, when your phone has GPS and knows where you are. If I am searching for pizza in a one mile radius from my current position and you own a pizza place nearby, how much would you pay to be on top of the list? Or - at least - very visible? Dollars? Tens of dollars? I think so...

Anything else?

I predict a big chunk of advertisement will be driven by "ads in app". That is, advertisement placed inside applications you use frequently. Not intrusive. Not annoying. Just there, when you do something else. One example? Mobile messaging, a.k.a. push email. If you met me recently, I probably showed you the Funambol email client on the RAZR, with advertising on top. Not intrusive, but extremely effective.

Why?

Because:

1. the phone is a communication device. You either talk or send messages with it, 99% of the time. Everything else takes just a bit of your daily usage. Sorry, I never bought the mobile TV marketing story...
2. #1 means you are going to spend more time in front of your messaging client than anything else. The mobile messaging client is going to be the most expensive piece of real estate on a device.
   
3. if you tie mobile ads in a mobile messaging client with location, you have the killer mobile ad conduit.

Imaging this: you walk down a street, your phone beeps, you open the phone to read the message your best friend sent you and the ad on top offers you a free latte at the Starbucks three steps from where you are. Location-aware, not intrusive, highly effective. You stop, walk in the Starbucks, get the latte, read the message from your friend, then you realize latte actually in this country does not mean just milk... You call your friend and ask who in the world thought to drop the word coffee from caffelatte... Isn't that weird?? Go and ask for a latte in Milan and see if they bring you coffee with it or not :-)

Forget browsing, location-aware map searches and ads in apps are the future of mobile advertising. It is hot today, it is just going to get hotter and hotter. Like your latte with coffee.