Social media can enable more targeted advertising

But adoption remains low as industry grapples with how sensitive user data should be handled, says mobile advertising executive, who adds smartphone users still have choice in viewing ads.
Written by Tyler Thia, Contributor

The demographics of social media users can be tapped to enable even more targeted advertising, but this has yet to be widely adopted as the industry is still unclear on how sensitive information should be handled.

According to Atul Satija, managing director of InMobi for Asia-Pacific, these issues will eventually be addressed and drive the adoption of such targeted advertising.

Social media sites "understand the user better" due to their understanding of user behavior and the demographics they collect on each user, but these are done within the constraints of policy guidelines, Satija told ZDNet Asia in an interview.

"We need to be very careful on the user's private information. It's not trivial, it's very important to the user, and that is why people are talking about how to handle it," he said.

One way the industry can achieve this is to provide social media users the freedom to submit their data to advertisers anonymously, suggested the executive, whose firm is a global mobile advertising network.

While the potential of targeted marketing remains to be seen, some new developments are already taking off in the advertising space--thanks to the proliferation of smartphones and tablets, he said.

Satija revealed that InMobi recently partnered Cooliris to produce 3D advertisements. "If you're using an iPad, you can completely experience 3D advertising through a simple banner. When you move the tablet, you'll see the product move a little bit. When you touch it, it expands and you can move it around and have a deep engaging experience of that product, which is very relevant for verticals like automobiles, consumer electronics and devices," he explained, adding that 3D advertisements are already running live on its advertising network,

The company also pushes out rich media ads, where users can watch movie trailers on the same page instead of having to open another browser. Click-to-call ads are also popular with retailers, Satija noted, adding that mobile users can call the merchant straightaway by touching the ad. This delivers an "engaging experience", an element that Internet advertising is not able to provide, he said.

Today, banner ads remain the most popular form of mobile advertising. In the Asia-Pacific region, Apple's iPhone is still the "single most dominant platform in terms of ad impressions, accounting for 11 percent share of all impressions in January, according to InMobi's latest stats.

The region clocked 4.3 billion impressions between October last year and January, of which 23 percent were served to smartphones.

While Nokia was the largest original equipment manufacturer (OEM) and Symbian the largest OS on the InMobi network, the company's numbers showed that impressions from smartphones grew 69 percent compared to "advanced" phones--a category between feature and smartphones--which registered a 27 percent growth.

Android gaining strength
Google's Android market is also showing potential having seen its market share grow by 5 percent, Satija said, noting that the decreasing cost of Android phones is fueling the platform's popularity.

"Android phones started from being very expensive to now [where they're available in] a variety of price points. It went from US$600 to as low as US$150 or US$100 in some countries, and the price is still coming down.

"So Nokia is already losing share in most markets to Android phones across many OEMs and this trend will continue," he said.

When quizzed on its revenue model, Satija said InMobi operates a 60:40 policy, where app developers get 60 percent of the revenue from the advertisements and the advertising network pockets the remaining share.

The company works with both software developers and ad publishers on the supply side, which produce apps or content that are mainly provided free or of little cost to consumers.

"Those who don't charge users for apps need other ways to make money, and we become the main partners for them to make money because we help them monetize the traffic that is using their application," he shared.

No to turning off ads
Although he stressed that the company does not work with app developers that charge users to download their software, Satija clarified that some of them operate both models, pushing "lite" versions of apps that require some payment to gain full usability. InMobi has roped such developers into the "monetization" channel as well, he added.

The executive added that consumers also have the ability to choose whether to view advertisements on their mobile devices.

When asked about the possibility of allowing users to "switch off" mobile advertising in the future, he said this would all start with the consumerization model the handset user chooses.

"You already have a choice to watch ads or not watch advertisements in most mediums. We choose ad-supported models because it reduces the price of content," he said. "TV content comes with ads--we don't allow or disallow such advertising--and the same goes for newspapers."

"I see people making a choice in mobile ads. Developers are already making a choice on whether they should give a paid app or an ad-supported lower priced, or free, app. Mobile is already giving you [more] choices than other mediums, I think that trend will continue," he added.

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