The mobile advertising market is booming. Total U.S. mobile ad spending is expected to rise from almost $800 million last year to $4 billion in 2015. This sounds great to publishers hoping to build mobile revenue streams.
The problem is, there are already more ad positions out there than ads to fill them. One study showed that only 18 percent of all mobile ad inventory was filled in the second quarter of this year.
A recent projection estimates the total value of U.S. ad inventory in mobile apps is already near $1 billion and will spike past $4 billion in 2012 — a full three years before ad spending catches up to that mark.
We know what this leads to, because we’ve already seen it play out in the market for online display ads. Overabundant inventory has depressed average CPMs, pressing website owners to turn to house ads at best, or at worst remnant networks that fill pages with cheap ads for teeth whiteners and home refinancing.
Can your app or mobile website avoid this? Perhaps, but only if you follow a strategy to distinguish your content and your audience. News publishers have to court audiences, build great user experiences, and work with advertisers to develop rich ads that are more engaging than annoying.
Target an audience
Abundance of ad inventory means it’s not enough to draw lots of eyeballs to your content. You have to focus your content and your marketing to draw the right eyeballs.
Consider one or more of these audience types to target:
- Ripe consumers. Advertisers want to reach people who are preparing to spend money on their product or a competitor’s. If you can attract people who are about to take a trip, buy a car, or open a savings account, the hotels, auto dealers or banks are potential ad buyers. The best way to get these audiences is to build apps that help users accomplish those tasks.
- Users within a specific demographic. Whether you draw 18- to 24-year-old men or 55-and-older women, focusing products or content sections on different groups will help attract advertisers who know those groups are likely to buy their products.
- People with certain behaviors, such as those who go to the gym, attend baseball games, read e-books, or often eat at restaurants. Or people with certain interests, like politics, movies or education. If your audience is known to have certain habits or hobbies, this can attract related advertisers. A recent survey showed 60 percent of smartphone users said they prefer to receive ads personalized by their interests.
- People in a specific location. As I wrote recently, the location-based ad marke is not mainstream yet. But it’s likely to grow and can be part of your ad mix.
Strive for rich, useful ads
If you’re going to claim that your product offers advertisers a special opportunity to reach a special audience, the ads should be something special as well.
Once you attract the right audience and the right advertiser, the next step is to make the ads effective. Try to push beyond static display banners to ads that are interactive or at least link to an interactive, mobile website or a telephone number.
You should also push for ads that serve the user, not just the advertiser.
Some of the most effective ads offer a benefit to the user, like 10 percent off, free shipping, a sneak preview or a free trial. The magic of Groupon and LivingSocial is that millions of people have asked to receive their daily marketing emails because they serve the user as much as the advertiser.
If you can get these two pieces right — strong engagement with a targeted audience and attractive, engaging ads that serve that audience — you’ll be in strong position to rise above the proliferating mass of generic mobile ad inventory.