5 ways telcos can get bigger on mobile ads

Virat Patel/Venture Consulting
17 Sep 2013

Much has been said about the prospects of mobile advertising, but there is still a long way to go before it becomes truly mainstream. Current breakdown of ad spend across media worldwide has yet to keep up with the change in consumer time spent across media, with print and mobile showing the greatest disproportion.

In 2012, the US ad spending share for mobile only reached about 2% of total ad spending while mobile time spent share has reached about 12%. Even as the gap narrows, it is OTT (over the top) players that are reaping the gains, not telcos or their associates, who have traditionally been the main publishers of content over mobile.

Google is estimated to take in over 55.9% of net mobile internet ad revenues worldwide in 2013, which translates to $8.85 billion. Facebook, which only started to enter the mobile advertising scene in 2012, is forecast to increase its revenues by 434% to reach $2.04 billion in 2013.

Yet this is not surprising, given the investments that these large global players have made in the past few years. Google acquired AdMob in 2009 for $750 million. Apple managed to acquire Quattro Wireless, AdMob’s rival, for $275 million a year later.

There are a few reasons why spend on mobile advertising, outside of these big players, is stumbling. One is that there are no industry-wide metrics in place. Without this, advertisers are more reluctant to spend.

OTT players however, have their own in-house analytics, and are more able to demonstrate the efficacy of ads placed on their sites. Google announced in April 2013 that it would improve its standard metric on both DoubleClick and Google Display Network.

Another reason is that seedy practices in digital advertising make advertisers even more reluctant to spend. Bots simulating click-throughs as well as ad servers placing brands’ ads on ill-suited websites not only puts advertisers’ money to waste, but in certain instances has a negative impact on the brand.

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