Thursday, February 16, 2012

The Mobile Advertising Platform

Ad auctions, as we’ve seen in class, generate large amounts of income for big name companies like Google who pulls in $12-16 billion annually from ads. As time goes on, the amount of total revenue earned from selling and hosting ads on the Internet continues to grow. Even as online advertising expands, another platform’s advertising potential continues to rise and has become a new ad battleground for these big companies.

Mobile devices continue to be increasingly popular and have reached a large percentage of the general populous. Many people rely more on their mobile devices, such as phones and tablets, than their own computers. When you have the Internet in your pocket, why sit at your desk? This huge boom of mobile usage has created a large market that many advertisers are still trying to figure out. Mobile webpages and apps can be equipped with ads like their computer counterparts, but many companies haven’t taken full advantage of the capabilities. For this reason, a lot of the mobile adspace remains unclaimed. With this low demand, prices for ads on mobile devices are lower than for full computers.

To win a higher share of this market and attract new business, Google and Apple have been slashing their prices for mobile ads, lowering their minimum prices. This change follows Facebook and LinkedIn’s desire to open up advertising on their mobile apps. Many big companies are going head-to-head to secure business and gain a large portion of the market before it ultimately explodes with demand. With so many potential targets, it is only a matter of time before companies catch up to the mobile shift and ads start flooding mobile devices.

Even with all the price decrease and buzz, the overall advertising schema remains roughly the same. Google’s new changes bring its ad-auction system in line with its desktop counterpart. The cost-per-click and targeting auctions discussed in class will still play a huge role in the pricing for mobile ads. These prices drops are merely meant to entice new comers to the field before the competition ultimately becomes as heated as the desktop market.


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