Wi-Fi is killing mobile advertising

13 Aug 2012

Operators are increasingly enthusiastic about the prospects of Wi-Fi offload in their 4G roadmaps. But that’s going to be bad news for mobile advertising – at least until Facebook steps in to save the day.

That’s according to Shawn Scheuer, co-founder and CEO of mobile advertising network Moolah Media, who says that data from Moolah in May and June 2012 shows that conversion rates across “thousands of lead generation campaigns and over 100 million clicks” varied between 11.5% and 3.9% when ads were served over carrier networks, but just 0.6% for ads served via Wi-Fi connections.

The problem is that when users connect via Wi-Fi, it’s impossible to use targeting information like their wireless carrier to send more relevant ads to mobile users, Scheuer wrote in an op-ed for All ThingsD:

A mobile user’s carrier reveals a lot about who they are and how they might interact with an ad – information that’s essential for an ad to reach its target audience and to ultimately be profitable. Even the most basic facts are important: If an ad requires a credit card purchase, it makes sense to target users on a monthly billing cycle rather than those on prepaid carriers who may not have credit.

With Wi-Fi expected to account for over half of web traffic by 2016, mobile advertising will struggle to deliver relevant ads to users – which is of course one of the big differentiators that mobile broadband and smart devices are supposed to deliver. And that’s before working in other factors such as third-party browsers that hide info such as device type and country location.

The solution, however, could be Facebook, which is not only already in the relevant ad delivery business, but also pushing to bring that capability to mobile. Facebook already has the depth and breadth of detailed info that mobile advertisers want, and is now looking at how mobile users interact with other apps to deliver ads more efficiently, Scheuer says:

Facebook has the power to create targeted market segments, ones that are significantly more focused than just carrier name. And the now-public social network also has the resources to focus on post-click actions and backend – the unseen aspects of mobile advertising that truly matter to advertisers and can generate real profits.

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