Touching on the technological barriers for ad networks, David Gwozdz, CEO of Mojiva, New York, said that ad networks can be very valuable by providing targeted advertising at scale for marketers where standalone mobile publishers cannot. "If the core technology is good, it is capable of recognizing all handset types,” he said. “This is a challenge and requires us to spend significant time and money making certain that our device-type detection is up to date with all of the new devices in the market.”
Challenge 1: educating the masses
Mobile is still in its early stages, although the medium has made progress and evolved in the last couple of years.
New devices – Apple’s iPhone, for example – helped the mobile advertising space develop from small static banner ads to a rich-media experience on a larger screen.
However, like in the past, marketers are weary of trying new things because of a fear of failure.
Additionally, there are channels such as print, Web, outdoor and direct mail that have been around for a long time, so figuring out how mobile fits in is mindboggling for some.
“We really only have one challenge and that is educating advertisers on how ad relevancy is hyper-critical due to the highly personal nature of mobile devices,” said Paran Johar, Los Angeles-based chief marketing officer of Jumptap.
“What's more critical in buying mobile ads is the impression advertisers make, not the amount of impressions they buy,” he said.
Challenge 2: meeting the advertiser’s needs
Hyper-targeted campaigns could be challenging for ad networks.
For example, doing a hyper-local ad campaign targeting New York consumers is easier than, say, a campaign that looks to reach people in Gary, IN, which has a population that is less than 150,000.
“It is easy to provide scale for advertisers trying reach customers in New York City,” Mojiva's Mr. Gwozdz said. “It is quite another story to reach iPhone users in Parsippany.”
Challenge 3: selling publisher content
Mr. Gwozdz also pointed out that ad networks often face the challenge of trying to sell publisher content for the value it deserves.
Many marketers want to dive straight to the lowest cost per thousand or cost per click.
“Holding content value can be a challenge, but we work with our premium publishers to understand the value and sell on that unique value,” Mr. Gwozdz said.
Challenge 4: minimizing creative work for advertisers
Ad networks also are challenged with providing less work for advertisers.
Brands and advertising agencies do not want to create a different ad unit for every single mobile platform out there.
Ad networks need to ensure that their technology provides a valuable resource for marketers.
For instance, if marketers are using display banners, they can develop one standard Mobile Marketing Association-sanctioned size and Mojiva will automatically detect the handset size and auto resize for all devices.
“If the advertiser is running a rich-media ad, say a video unit, the technology again detects the phone capabilities, eliminating broken ads and images and keeping the consumer experience intact,” Mr. Gwozdz said.
Challenge 5: mobile is mobile
Millennial Media's Ms. McKelvey said that one of the largest challenges that all the mobile pure-plays face is the misperception that the mobile Web is the Internet on wireless devices.
In the early days of online, advertisers attempted to use print as the primer for online creative development and execution, which clearly did not work.
Online was a distinct medium and required an entire industry to carve out its place in the media budget.
Now, in mobile, there is some level of confusion for advertisers who are told that online technologies can be easily extended onto mobile.
“That couldn’t be further from the truth,” Ms. McKelvey said. “The mobile environment is extremely complex. On any given month, there are approximately 62 million users on our network across 4,000 devices, across all operating systems, carriers and browsers.
“Factor in the vast difference in consumers’ online versus mobile behavior, thus the real-time optimization and ad-serving technology required for mobile, and it should be clear why advertisers would only want to partner with a mobile pure-play when building their mobile strategies,” she said.
“In the cases where they do not, the consumer experience can be substandard, and the advertiser’s campaign results could be below expectations. Since the advertiser controls the media spend, there is a risk that they will choose to spend mobile dollars elsewhere.”