Monetization on mobile cant be like the web

GigaOM's Ryan Kim, Zephrin Lasker of Pontiflex, Brian Wong of Kiip, Keren Zemer of Appsfire , and William Hsu of AT&T at Mobilize 2011

Mobile advertising is a different beast than any advertising that came before, and the opportunities to measure engagement and even conversion may also influence advertising elsewhere. This may be a somewhat obvious conclusion, but in a panel on going beyond the CPM at the Mobilize 2011 conference in San Francisco participants got into details about how mobile will change advertising by becoming less like the web model and through better understanding of how mobile ads change and drive consumer behavior.

For example, William Hsu, SVP and Chief Product Officer at AT&T Interactive, indicated that the operators was looking at how to move beyond the YellowPages model of advertising to something more valuable and contextual such as television advertising. For him and for some other members of the panel, the opportunity presented by mobility was in being able to understand and track exactly how an ad on a phone might influence the end customers.

Brian Wong, the CEO of Kiip, explained that a campaign his company did for a major national consumer electronics retailer with a yellow label, resulted in 15 percent of people who won a coupon actually going into the store and buying something. Being able to track those results and offer that to advertisers can be confusing for ad firms but is attractive to the product company that hired the ad firm.

However, today, were st! ill in a web-dominated world in part because ad firms and their clients understand that model. The result is developers who are trying to game the system and place ads next to areas on-screen where a consumer might click even if it is an accidental click. Zephrin Lasker, CEO and co-founder of Pontiflex, noted that 50 percent of clicks are accidental.

This obviously upsets consumers, who dont want to interrupt their gameplay with an accidental click, but its also elevating the click-through rate to levels it may not deserve. Hsu reminded the panel that click-throughs are really a proxy for how an ad might help the advertisers business grow. He predicted that in a year we will be able to track how an ad converts to traffic in a store and within 24 months we will be able to track it all the way through to purchase and the size of the purchase.

The rest of the panel was dominated by the idea that mobile can lead to the creation of an entirely new type of advertisement. While Wong called it voodoo technology, its clear that the combination of location, the deeply personal nature of a mobile device and better data tracking can create an entirely new and more effective way to get people to buy things. Unfortunately, no one on the panel discussed how users might react to all this high-tech effort to part them from their cash.

Watch live streaming video from mobilize2011 at livestream.com

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