Mobile Advertising - Nuisance or Value?

In the mobile application business, advertising is discussed as a way to make money for publishers of mobile content and applications. In many ways it is treated the same way as advertising on television, in newspapers or magazines – a nuisance there for the sole purpose of paying for the content and ‘fund’ the business. But is this really the case?

It is clear that much of today’s mobile ads qualify as nuisance, especially the lower end ads served by ad networks. Ring-tone and wallpaper download sites and generic messages about education, dating or religion feel a bit passé. But mobile ads can be something very different – information closely related to the application itself, when and where the user is and even information about the user. Such ads have the potential to be more relevant to what the user is interested in and thus provide real value.

This is of course called contextual ads and versions of these have been around for some time. Location context is what set this in motion followed by relevance to the application ads are placed in. If the user is willing to share personal information, contextual can be expanded to age, sex and interests. If the results are very relevant ads, chances are, users will share their personal information as long as it is not used for other purposes. At mJetz, to our surprise 70% of registrants voluntarily provide this optional information. But in order for contextual to work, there are two conditions that have to be met in order to improve the value of mobile ads?

• Mobile apps have to deliver better contextual keywords that are focused on getting ads with as much relevance and value as possible, not just click-troughs.
  
• Mobile ad networks have to improve so that they only serve ads directly related to the contextual keywords associated with the mobile app. No match – no ad!
  

Right now we are in a transition period where ad networks serving the premium phone app market are better at this than the mass market networks. Despite this, there are plenty of nuisance ads slipping though. Until both conditions are improved further, we nearly need a filter function that screens out nuisance ads from the mobile user experience. It is better to have no ads, than ads that are a nuisance and reduce the total user experience. When only relevant and valuable ads are shown, the user experience will improve – as will click though rates.