2010: Another Year of Waiting for Serious Revenue from Mobile Ads, Online Display and Social Media

If it is a new year again, it’s time to predict that advertising on mobile devices will really, really take off in 2010 in a way it hasn’t already.
 
If you think you’ve heard this before, you have — every year for the last four or five, at least. However, 2009 was the year of 100,000 apps for the iPhone — can robust advertising expenditures be far behind? Well, yes.
 
Joe Marchese, who writes about the industry for MediaPost, thinks 2010 will be the year, but it “will be the year mobile begins to realize its potential for marketers.” Why the caution? Mobile “is evolving so fast it’s hard to create best practices that are repeatable. That’s what 2010 will be all about. There will be some huge success in mobile that will point everyone in the right direction.”
 
Perhaps and probably. But the skeptic in me wonders. Mobile adoption, and more recently, page views of mobile news at sites such as nytimes.com, are up, up, up like a steep mountain face. But I’m not sure we know yet that marketing messages are welcomed by mobile users, or that they’re effective in bringing customers to the store. So maybe huge successes are still several years off. Or maybe search will remain the dominant from of digital advertising indefinitely.
 
I heard echoes of the same reasoning in a succinct account by Mark Briggs, author of Journalism 2.0, of a recent Interactive Local Media conference in Los Angeles. His summary takeaway was, “Local online is a highly immature space.” Which I suppose is to say that there seems to be enormous potential there, but not much has been realized other than search.
 
“The display ad opportunity (think banner ads) has yet to take off for local,” Briggs continued. “Aaron Finn of AdReady noted that there are roughly 1.4 billion businesses participating in search whereas there are only 44,000 businesses participating in display. ‘Display will be bigger than search in five years,’ he predicted.”
 
Maybe I’m missing something, but my read of the evidence is that online display is flourishing only for those sites that assemble huge audiences and/or can target the ads to reader interest. And the action is predominantly national, as small local businesses are slow to try online advertising except for search or a hybrid search/display combo like digital yellow pages.
 
It makes sense to me that newspapers and other traditional media should be among the explorers of the big potential market, but I’m not nearly as sure as Briggs and other digital enthusiasts that this train is leaving the station anytime soon.
 
Social media presents the same challenges. It is indisputable that Facebook and Twitter are runaway hits now that they’ve gathered millions of users. Whether ad messages have a place among the tweets is less clear. For now, social media may be contributing to the glut of ad inventory that is driving generic rates down.
 
Another MediaPost contributor, Laurie Sullivan, suggests that the novelty of social marketing will wear off in 2010 and marketers will insist on stronger metrics and strategies. This year will be “the year social marketing gets serious,” according to Forrester Analyst Augie Ray.
 
The opportunity of these underdeveloped ad venues naturally excites venture capitalists and the big digital players. They are trying to, as Wayne Gretzky may or may not have said, “skate to where the puck is going to be, not where it is.” Witness Google’s recent $500 million courtship of Yelp, a consumer-rating site that combines both mobile and local online with a dollop of social media as well.
 
What makes sense as a high-risk, high-reward play for these venturers should not be seen as a sure thing with immediate revenue prospects. I think you could blame the optimistic forecasts of recent years for mistaking a possibility for a trend. 
 
Even I don’t want to start the year on a note of digital denial. But perhaps 2010 will turn out to be another year of sorting out, rather than taking off, for ads in any of these growth sectors.

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