Monetizing the Mobile Era

Via Alexis Madrigal (I refuse to link to him because when you open his Atlantic blog page, you get the ancient phone modem sound, which would be fun & cheeky of Madrigal except it’s one of the most grating sounds that technology has ever produced. Second to the beeps when you accidentally dial up a fax machine when you’re trying to reach your embarrassing medical provider, like your urologist, or make your colonoscopy appointment, and it’s already been a long day and you can’t believe you dialed up the fax machine instead and why can’t you get anything right and all you need is just 2 hours off from life, maybe in a cave or under the bed, because you can’t get to a beach from here, and you’d be ok.)

I’m sorry. Were you saying something?

So you guys know that I love the skeptical economics. Well, this article is making my day. Even though I read it like 2 days ago. That’s how good it is.

Some trendsetting pros are pointing to a $20B gap between “traditional” online and mobile advertising income streams. They are calling it the $20 billion promise of mobile ads. But my BFFs Frédéric Filloux and Jean-Louis Gassée very reasonably and calmly point out that this $20B emperor is nekkid. As nekkid as some of the (insert online porn joke here yourself. This is a family blog).

For one thing, they say, our best tech industry minds have been trying to get mobile ads right for 5 years, when the first major smartphones came out. And they haven’t done it yet.

Both Android and iOS are prosperous platforms with bulging App Stores, they sell tens of millions of devices every month, close to half a billion this calendar year. Brand managers, advertising agencies, search engines, social networks, a myriad of vibrant startups keep trying, but mobile advertising barely moves the needle.

Their theory is that people get blindsided with thinking that their new technology is just like the old but in a different form. So the iPad is just like the iTouch, but bigger. And it’s happened since computing came out.

Decades ago, incumbents had to finally admit that minicomputers weren’t simply small mainframes. Manufacturers, vendors, software makers had to adapt to the constraints and benefits of a new, different environment.

So people delude themselves by thinking comfortably: mobile ads are just smaller versions of PC ads. When, in fact, mobile ads are substantially different. And smartphone use is substantially different from desktop use.

Maybe, you know, just maybe, online ad dollars won’t transfer over to the mobile platform so cleanly.

Some prominent academics wrote a whole book on this phenomenon called Remediation, about the ways that we see new technologies only in terms of old ones. And the ways that we can draw on this aspect of our technological heritage to understand contemporary culture more deeply. (And I’m talking, print technology, sound technology: much further back than the dial-up modem).

So maybe our tendency toward remediation is built into our relationship to technology. It’s not Facebook’s fault that they miscalculated their mobile ad potential. We’ve all been doing it, for a long time.

So what can we do to monetize mobile?

The authors here recommend accepting that the $20B promise is a mirage. That the way we use smartphones and our concerns about privacy are impossible hurdles to overcome. Mobile ads will never be as successful as desktop online ads. Suck it up, monkeys.

But I doubt that our captains of industry will accept this. So what can they do?

They can learn as much as they can about these hurdles. They can understand all the ways mobile usage is different from desktop computing. They can learn about our conflicted attitudes toward privacy. They can try to see past immediate, quarterly benefits and plan long-term strategies that leverage a deep, rich understanding of the mobile era.

They can think a little harder before they bank on crazy $20B predictions.

I’m excited to see how mobile business evolves. Makes me, almost, want to go to business school.

Who knows?

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