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Profitable mobile advertising campaigns: fantasy or reality? (Part 1 of 2)

by Adam Foroughi on Apr 28, 2013

The title says it all. Profitable mobile advertising campaigns are not easy to find. It’s certainly due to a variety of factors. I consider this problem to be the biggest challenge in mobile advertising. Yet, if we drill into how the mobile market is evolving, it’s an achievable goal. Apple is helping to drive profitable mobile ad campaigns with its forward thinking improvements around tracking user activity for purposes of advertising.

For background, on the web, ad tech companies track user browsing behavior and demographic data via the use of cookies. They do it all in privacy safe ways, allowing advertisers to tie revenues generated back to specific ad spend and placements. ROI is calculated and budgets adjusted. Certainly a cycle that works well for the action oriented marketer. For example, a company like Criteo may display a highly relevant advertisement to me after I visit Hotels.com. The typical scenario may be that it retargets me for 48 hours, showing me ads for hotels in Palo Alto as I traverse the web. If I click on the link back to Hotels.com, that purchase can be directly attributed back to past activity.

In-app traffic, however, lacks fundamental tracking technology (i.e. cookies). Can mobile advertising ever bridge the effectiveness gap? The answer is an emphatic “yes!”. I believe we’re at an inflection point in mobile where the leading ad tech companies will allow for the same type of ROI-based and/or action-based goals as we see today on the web. With Apple making the big move towards IDFA now (its universal identifier for advertising), it has actually opened the horizon for proper attribution. Prior to this move, there were privacy concerns with identifiers like UDID, and no single standard. Publishers passed certain information, advertisers tracked against other items, and attribution was highly complex. With the single standardization, the future prospects of mobile advertising are considerably brighter.

Now, advertisers have a single measurement tool that can be neatly attributed across all in-app mobile ad inventory. Data companies will grow to aggregate demographic and user purchase behavior tied to the single IDFA. Eventually, retargeting will be possible and prevalent. As consumer consumption quickly shifts from traditional web to mobile (and specifically in-app traffic), advertising capabilities will bridge the ROI gap, consumers will start to see more relevant mobile advertising, and everyone will benefit from the virtuous cycle.

A relevant future indeed!

Adam Foroughi is AppLovin’s CEO.

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