Update: Mobile ads double in first half of 2013, reaching $3B

Advertisers see the power in small screens

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Facebook has also contributed to the growth. Shapira said Facebook had no mobile ads in August 2012, but jumped to about 16% of the total mobile display ad market in a year. Thats new ad inventory for them, he said.

New tools for mobile advertisers, such as programmatic bidding, have also helped. With this tool, advertisers can bid instantly online for the cost of an ad that will reach a certain demographic group sorted by age, gender and interests. Because larger display ads are deemed as looking better (and therefore considered more successful) on larger devices like tablets, it costs more to bid successfully for ads on tablets than on smartphones, Shapira said. So, as tablet sales increase, tablet ads will make up a proportionately larger share of the advertising spent on mobile.

Roger Entner, an analyst at Recon Analytics, said mobile ads are also on the rise because smartphone and tablet users spend hours using such devices each day. Advertisers are waking up to the fact that they are spending far more money proportionately for TV, radio and other traditional advertising than they do on mobile, even though many mobile users are spending more time with their smartphones and tablets than they are in front of a radio or TV, he said.

Entner also said that mobile ads need to be more effective and avoid turning off users. "It's universally agreed that Internet advertising is horrible and when you transfer that to mobile, it becomes even more horrible," Entner said. He said he's seen video ads designed for large-display TV screens that have been shrunk down to fit on a 4.5-in. smartphone display, which doesn't work well.

Entner urged advertisers to target ads to their audiences more carefully to include user preferences. For example, if users agree to allow a smartphone app to track their whereabouts through GPS, it probably means that the application is going to offer up ads suitable to the user for nearby products, based on previous purchases or other user profile data. But Entner said the ads need to be better targeted.

"If advertisers are going to invade my privacy by tracking me, then they should do it well and show me something they think I'll really like," Entner said. "Advertisers are making slow progress with this and when it works, it works really well for the advertisers. That's part of why we're seeing this mobile ad increase."

This article, Mobile ads double in first half of 2013, reaching $3B, was originally published at Computerworld.com.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

Copyright © 2013 IDG Communications, Inc.

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