Counting mobile advertising effectiveness remains a challenge

Like Britney Spears, mobile advertising is desperately in need of some monitoring.
Market research firms seem to be tripping over themselves to offer the most optimistic projections for wireless ads. The Kelsey Group predicts the U.S. market will grow from $33.2 million last year to $1.4 billion by 2012, while IDC believes wireless ads in the United States will generate as much as $4 billion by 2011. Worldwide forecasts range from $14.4 billion by 2011 (Strategy Analytics) to $24 billion by 2013 (ABI Research).
For those kinds of atmospheric figures to be approached, though, the industry will need to find better ways of analyzing traffic on the mobile Web and measuring the effectiveness of wireless ad campaigns. A small audience coupled with “the lack of critical mass of educated advertisers able to measure return on investment will restrain mobile media’s potential in the midterm,” according to a report released last month from JupiterResearch.
“Mobile advertising is destined to be a multi-billion euro industry,” wrote JupiterResearch President David Schatsky. “But the maturation of this industry could take a decade. Advertisers tend to be slow to reaction to consumers’ changing behaviors and will need more than encouraging trials and early click-through rates to begin to invest massively in this nascent medium.”
The challenges in mobile are so complex that even Google Inc. is struggling to compile accurate information. Google AdWords, a service that tracks the number of visitors that take a specific action on a site, leverages technologies such as JavaScript and cookies that – while ubiquitous on the fixed-line Web – are relatively uncommon in mobile.
“Without JavaScript and cookies, the vast majority of conversions resulting from AdWords on mobile devices will go undetected,” the London-based search engine marketing agency AccuraCast noted last month. “This is a serious issue, as it implies that the ROI calculations on many mobile advertisers make for their campaigns will be far from the actual figures. Not only is this a serious problem for Google, who has traditionally bragged about the exceptional accountability and reporting capabilities of its advertising platform, but it is also one that cannot be solved by the search giant.”
That inability to accurately measure the effectiveness of mobile ad campaigns was the source of much of the activity at the Mobile World Congress last week in Barcelona, Spain:
Nokia Corp. made its long-awaited mobile advertising play by introducing Media Network, an alliance of more than 70 publishers and operators including Sprint Nextel Corp., Discovery, Heart and Reuters. The network, which claims a potential reach of 100 million mobile consumers, leverages analytics technology from Enpocket, a Boston-based startup acquired by Nokia for an undisclosed sum last year.
Five European carriers formed a working group to develop common measurement standards for wireless marketing campaigns. GSM Association members Vodafone Group plc, Telefonica O2 Europe, T-Mobile International and Orange aim to work with advertising industry associations to develop a range of metrics to “describe the mobile audience” and measure the effectiveness of wireless ads.
Comverse launched a mobile ad solution that comprises an ad server, ad-targeting engine, data collectors and a campaign management component as well as a comprehensive billing and reporting tools.
A host of others are working to develop analytics for mobile ads as well. Millennial Media and Third Screen Media, among others, have built solutions that attempt to build user profiles, monitor consumers’ behavior and measure the effectiveness of marketing campaigns on their advertising platforms. And Bango, a U.K.-based wireless firm that specializes in off-deck activity, recently joined the field with a hosted service that counts the number of unique visitors to sites and determines the type of phone being used and the language and country of the user.
Bango is giving the service away to operators of smaller wireless Web sites in the hopes of expanding its reach. The company hopes to leverage its existing network of mobile site operators – as well as its position outside the traditional mobile ad space – to create a standardized system for tracking activity on the wireless Web.
“Millennial has a very good product; they can give you terrific analytics about how their marketing channel works. So can Google, so can AdMob. But what they can’t do is compare that to each other,” said Anil Malhotra, Bango’s VP of marketing and alliances. “One of the challenges of the mobile marketplace is that it is fragmented. We actually think that because of the big footprint we’ve got, we’re in a position to become the standard.”