The mobile advertising industry has become something of a double-edged sword for app developers. On the one hand you’ve got booming smartphone adoption rates and lots of data suggesting that users engage more with mobile ads than regular online ads. On the other hand there’s an oversupply of inventory (i.e. too many apps) and advertisers are – on the whole – being very cautious when it comes to mobile spend.

why_app_developers_need_to_think_hyper_local Why App Developers Need to Think Hyper-Local

 Why App Developers Need to Think Hyper-Local

Why Mobile Advertising

So why is mobile advertising not the wonderland of opportunity many expected it to be? Well the main culprit, according to most in the industry, is the ineffective tracking of mobile campaigns. Essentially, advertisers want the sort of robust analytics offered in the online space, but they can’t get it. Explaining why would take up another blog post, so we’ll put that to one side for now. However, the crucial question for app developers may not be “will mobile ad tracking ever catch-up to the online space”? But rather “should we be approaching mobile ad tracking in the same way as online ad tracking”?

This is a question put forward by Eli Portnay, CEO of ThinkNear, who argues that traditional online tracking should not be the holy grail for mobile advertisers, because it forces a model of ad engagement onto a medium that it doesn’t necessarily fit. Mobile is all about portability and advertisers need to take advantage of this USP, by measuring ROI in new ways.

This attitude toward tracking dovetails nicely with the the next big thing in mobile advertising – hyper-local ad-targeting. Of course, local ad-targeting on mobile already takes place today, but many analysts predict that the recent entry of Facebook and LinkedIn into the mobile ad space will begin to spark a boom in businesses using very localised ad targeting. This could be anything from a a recruitment company targeting LinkedIn ads to professionals attending a particular industry conference, to retail businesses funnelling shoppers to under-performing branches over Facebook.

What Does this Mean for App Developers

So what does this mean for the average app developer? Well if more and more advertisers are going to start measuring campaign effectiveness based on data tied to local ads, then app developers have an opportunity to leverage hyper-local functionality in order to maximise ad engagement amongst users.

It’s not just the big boys such as Facebook and LinkedIn who can benefit from local targeting (although they no doubt will). Making the most out of local ads can be as simple as developing an app that encourages use outside. Even better, apps that are tied to shopping activities (list-making apps, discount calculators, product reviews), apps that integrate maps functionality, or anything that involves large gatherings of similar demographics (music festivals, art exhibitions, fashion shows etc). You can be sure that, over the next year, there will be dozens of new networks and platforms, helping app developers pair with advertisers who want to take advantage of hyper-local ads.

Evolve or be Left Behind…..

At the end of the day, anyone looking to fund their app via advertising needs to think first and foremost about how their users will engage with mobile ads, be they bog standard banners, or interactive games. If hyper-local ad-targeting really does push us over the tracking hump, and gets ad spend flowing to mobile, then developers will need to think ‘location, location, location’ if they want to make money.