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July 26, 2013

"Three Ds" Explain Mobility's Mysterious Ad Lag

Posted by Puneet Gupta (View Profile | View All Posts) at 9:51 AM

Apps Parents Trust and Kids Love [Source:Jennifer Jolly https://www.youtube.com/watch?v=mMc09SwUkd4]

People my age became acquainted with computing by using clunky desktops and laptops, but today's younger generations are introduced directly to mobile and tablet computers.

Apple ingeniously removed the telephone function from its iPhone to create the iTouch, a mobile computer ideal for children. They can use it to play educational games and take photos of their siblings and school friends. The younger generation is why mobile computing is growing exponentially. Apple isn't the only company on top of this trend. Google's Larry Page maintains that today's generation of kids will be introduced to computing through mobile devices.

The mystery, however, is why this platform lags traditional platforms when it comes to corporate advertising spending and monetization. Here's my take as to why this discrepancy exists. I've distilled these reflections into what I'll call the "three Ds."

  • Distribution - Getting a million downloads ain't as impressive as it used to be. It's a pretty saturated and competitive space. Nonetheless, if you crack that magic threshold, you're doing well. One of the neat aspects of the app market is that it's still very much a meritocracy. I don't know if anyone can predict which apps will do well - the best apps are compelling or downright addictive. But good developers will make sure there are hooks from those apps to social media sites with the expectations that they go viral.

    But despite the complex social network that promotes apps, the tried and true method for finding out about a mobile app remains - in North America and Western Europe, at least - traditional media outlets like magazines, newspapers, and television. This means big consumer brands have an obvious incentive to keep at least some advertising in traditional media ad not pour every dollar into mobile directly.

  • Design - The web has long trumped mobile devices when it comes to where apps first appear. But with the growing popularity of mobile, more developers are starting with mobile apps before launching their web versions. More mobile apps should be a positive development for mobile ads but not all platforms are created equally. Apple users are known for being more willing to pay for apps, which makes them all the more attractive to advertisers and developers.

  • Dough - Money makes the social media world go 'round. So far, however, social media giants like Twitter and Facebook have treated mobility more as an afterthought than key strategic driver. Why should they focus on a platform that hadn't been inherently social? Of course, that's changing quickly. You can bet your bottom dollar that social media entrepreneurs are already figuring out ways to reap the benefits of the merging of social media and mobility. It's likely that the social sites themselves will open up their vast storage houses to make money off implied (or actual) online behavior. Simple example: a status change to "single" triggers ads to be served from dating sites.

Of course, in places like India, China, and other rapidly developing economic powerhouses, there's less of a discrepancy between corporate advertising spend and mobility. In some ways, the Western world can perhaps find the answers as to how mobility will play out by simply looking eastward.

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