Mobile Advertising is  Moving to the Forefront

At Inman Real Estate Connect last month, there was one topic that seemed to consistently be the focus of marketing and advertising discussions: mobile. While this likely comes as no surprise to anyone who has been reading the news, what is somewhat surprising is the relative lack of information about the opportunities that exist in the mobile space.

We all know about iPhone apps, but this goes much farther. With the launch of iOS4 by Apple earlier this summer, the company also launched iAd, which will be Apple’s mobile advertising platform. So far, only large national advertisers have been able to participate in the iAd program, but it is expected that they will open it up to smaller advertisers by the end of the year. Currently, iAd works on all Apple devices running iOS4, which includes the iPhone and iPod Touch at this point, with the iPad expected late this year. One of the advantages of iAd is that the ads are shown right in the app itself and do not require the device to go to Safari to open a Web browser to view the ad. It also utilizes the information in the consumer’s iTunes account to tailor the ads even more (queue the privacy concerns). For example, if you want to reach people who listen to Frank Sinatra, you would be able to do that. That’s both cool and creepy at the same time. iAd is also reportedly the most expensive mobile advertising option.

Apple isn’t the only one jumping on the mobile advertising craze. Google also acquired AdMob late last year for $750 million, after it outbid Apple for the company. AdMob is called the world’s largest mobile advertising network, serving its ads to more than 23,000 mobile websites. It also claims to serve 7.1 billion banner and text ads every month across a variety of mobile devices. The pricing models for AdMob are somewhat comparable to online advertising. You may target based on age, gender and phone carrier.

And if you are only interested in reaching Houston-area consumers, then mobile advertising allows you to only serve ads to those whose phones are connected to a cell tower in the greater Houston area. It is not based on the originating location of the phone number. This also means that you would reach vacationers or visitors to Houston with your ads, in addition to residents.

The other big topic that kept being mentioned at the conference was location-based search. That seemed to be the technology on which virtually every company was working. From Microsoft and Google to small, month-old start-ups, location was on the tip of everyone’s tongue. Mobile advertising definitely hits on that subject.

The vice president of research and development at The New York Times said at the conference that he expected sales of mobile devices to exceed sales of desktop computers by the end of this year. It is also estimated that about 75 million adults in the U.S. now access the Internet using a mobile device (that includes phones, tablets, e-readers, etc.)

Another thing that mobile advertising has in its favor is the demographic that an advertiser would reach. According to Nielsen Ratings, 23 percent of mobile phone owners have Web-enabled smartphones. Consumers with Web-enabled devices are typically younger (which is the focus of most advertisers these days), better educated and more affluent than the average population. When buying a target demographic, the mobile user is not a bad one, but all things must be weighed against expense.

Those who jump in at the beginning, just as with someone who purchases new technology right away, will definitely be seen as ahead-of-the-curve—but it will come at a cost as well.

Mobile advertising is the next big thing, and it seems to be the next hot topic after social media. But after all this research and investigation, HAR decided to wait until next year to consider adding mobile advertising to its overall mix of marketing efforts. While HAR always strives to be on the cutting edge of all things—including communications, there is too much to be worked out with the systems to have any certainty of the value that it would bring to HAR’s members.