The 4 reasons why mobile ads are lousy
Ads are simultaneously an essential force in our lives and hardly in our lives at all. The paradox of advertising is that we spend most of our lives ignoring ads while we also spend hours browsing websites, reading articles, using apps, and "consuming" other "content" that could not exist without them.
That's why it matters that our attention seems to be moving toward screens where ad dollars are struggling to follow. My business column* in The Atlantic magazine this month is on mobile ads: Why they're so annoying and why it's so important that they get better -- not only for companies like Google and Facebook, who rely on digital advertising for 80+ percent of their revenue, but also for the entire media industry that has grown fat and happy expecting that advertising would always be there to pay their salaries.
The companies staring down the mobile ad challenge face three acute deficits: not enough data, not enough innovation, and not enough screen. None of these barriers are insurmountable. But no free ad-supported service could succeed without overcoming all three.
THE INFORMATION & INNOVATION & IMAGE DEFICIT
When you're snooping around the Internet on a desktop browser, do you ever notice that certain ads will follow you? Maybe you've checked out a par of sunglasses online, and every next site you open, the same pair of shades will re-load in the top banner ad. You might have many different words for this sort of advertising, such persistent, pleading, or creepy. Digital advertisers have a different word for it: re-marketing.
Remarketing (or re-targeting) means somebody leaves your site, and you show them ads on other sites to remind them to come back. It's just one way that our desktops use technology like cookies to learn more about us and serve us ads that we'll theoretically want to click on.
The single most important misconception we have about our smartphones is just how "smart" they are about us. We assume that, just because our phones are physically close to us, they must know us better than our computers. So, the ads must be more personal.
That's just not the case.
"Mobile targeting is very different because it doesn't give you the same information," said Gokul Rajaram, Facebook's product director for ads. "There are cookies on desktops so they can reach you later [through things like remarketing]. On a mobile phone, you're out of luck. It's a completely different universe so re-marketing goes to zero."
There's another reason why it's easier to follow people on computers than on mobile phones. It's harder to measure success -- or what the business calls "conversion" -- on mobile. Imagine you see an ad for a Best Buy product you actually want. On a computer, where you're comfortable shopping, you'll just buy it right there. That's an advertiser's dream. A successful conversion.
But most people don't shop on their phones. We research. You'll look up a local lunch place, but you'll pay for lunch at the restaurant. You'll snoop around for great headphones, but you'll buy them on your computer. How to you measure a successful "conversion" on a device that people don't spend money on? How do you know what ad worked and what ad didn't? It's a challenge that requires a lot of creativity.
Creativity. It's an underrated part of advertising economics. The most creative designers and copy writers and engineers design the best ads -- or ad "experiences" as they're often called now. And today, many of these people are not working in mobile for two simple reasons. The screen is too little, and the money is too little. The screen can't get much bigger, and the money won't grow until information gets better. Until it does, the smartest designers and creative thinkers in the advertising world are more likely to direct their considerable talents toward other screens and pages.
And that's how the information deficit, image-size deficit, and innovation deficit are all somewhat one and the same.
But there's a fourth deficit that isn't about the technology.
THE DIGITAL-ATTENTION DEFICIT
Along with books, ad-supported newspapers were once the entertainment hearths of the American living room. Then we added (ad-supported) radio. And (ad-supported) TV. With computers and phones came (ad-supported) sites and (ad-supported) apps. It's deceptively easy to think that as our focus shifts from platform to platform, screen to screen, advertising revenue will follow, simply because it always has.
I'm an optimist. I think attention moves faster than the ad business, and the ad business tends to follow, and it's too early to predict that there is something fundamentally flawed with digital advertising. But what if there is something fundamentally flawed with digital advertising, something fundamentally different about our attention on the Web?
"There's nothing inherently interesting about them, and insofar as they grab your attention, they tend to do so in a very annoying way, by preventing you from reading or watching the thing you were looking for ...
"In a mobile world, the distinction between being online and not being online is an increasingly silly one to draw. And as a result, the idea of using "time spent online" as a useful metric of anything, really, is equally silly."
You might think: so what? Ads are annoying. The fewer the better.
But the ability of advertising to move from platform to platform, screen to screen, is precisely what's delivered this golden age of entertainment. Every bauble on your smartphone screen is a business model, and the vast majority of them are venture-backed enterprises that rely on the promise of mobile advertising actually materializing. If ad people collectively decided that mobile is a broken platform to buy reader attention, it would mean something worse than the end of 1 inch banner ads. It would mean that our attention had finally escaped to a screen that was too small to pay. That's a pessimistic outlook, perhaps. The case for optimism is here.
*Editorial note: The column focuses mostly on the business and technology of mobile ads, and, for space reasons, we had to cut some of my musings about how the nature of attention -- and, therefore, the efficiency of advertising -- is fundamentally different on the Internet, and especially on the nibbles of Internet we consume on our phones. It was this great Felix Salmon piece that reminded me I should circle back to the digital attention deficit.