We have an intimate relationship with our smartphones. The mere thought of losing our beloved device is terrifying. Our smartphones help us with almost all of our needs – they are the last thing we see before we go to sleep, and the first thing we see when we wake up.

The promise of mobile advertising is clear – it has all the ingredients that could make the most powerful consumer engagement and advertising medium in history, but why do mobile advertising (in its current form), still suck? If everything is truly going mobile, it seems like we have not perfected the recipe. Time spent on mobile is fast outpacing time spent on desktops, but mobile marketing spend still lags way behind.

There are fundamentally two challenges:

1. Mobile advertising is still where display advertising was in 1999. 

Lacking targeting and mobile browsing standards

Display advertising has seen a huge maturation since real-time bidding. It has allowed for marketers and media buyers to advertise across a large amount of inventory at an affordable volume.

While mobile advertising has a lot of similar targeting options, it is still heavily lacking on behavioural data. Mobile impressions can be focused on Apps that are more appropriate for the demographic or geographic audience; however cookie-based retargeting in the mobile space is still very new and does not work across all platforms due to the fragmented mobile landscape.

A redefined definition of mobile “creative”

The progression of the banner creative over the past 15 years has been truly remarkable. New efficiencies in JavaScript, Flash and the overall bandwidth to cater for advanced banner ads from low-res flashing .gif files to something along the line of mini websites.  Similarly to mobile advertising today, banner ads a decade ago were seen in the same light – ugly, annoying and ultimately ineffective.

2. Publishers still do not know how to monetise mobile advertising 

Most large publishers, including Facebook, Amazon, and Google have been unable to put a value on their inventory. Inevitably, mobile does not have a monetisation problem, it has a measurement problem. If these publishers can start to define their users with meaningful segmentation, then they can offer marketers valuable inventory. These segments should be similar to what marketers use in the online world, such as demographics and behaviour, while taking advantage of the unique elements of mobile, like location. If these leaders are able to offer better inventory to marketers, consumer will benefit from more relevant ads. Just like desktop monetisation has been perfected over time, the same will likely happen for mobile in the coming years.

Don’t mess with my phone!

There are a lot of smart and creative people working on new ways to engage mobile users but not much has taken off in popularity…yet. There are two key issues that need to be acknowledged.

1. My mobile, is… Mine.

Marketers need to remember that they themselves are consumers too – we all have an intimate and personal relationship with our mobile devices, which are often highly customised with apps, skins and settings of our choice. Disrupting a personal activity is unacceptable to users. When mobile ads appear, users often feel that their personal space has been impinged upon – creating a negative reaction from the outset, regardless of the value or content of the ad being displayed.

Better retargeting (on mobile) can also be a double-edge sword. Publishers and marketers are still learning how to use mobile data in privacy-safe ways as the industry evolves. One of the reasons mobile advertising lacks the flexibility and power of online is the need for anonymity and complexity of conforming to good privacy practices. From the consumers’ perspective, they want control of their data and have a right to privacy.

2. User-interface

Mobile ads are often so small you need eyes like a hawk, and fingers like needles to interact with them. In a survey, it was found that around 40% of clicks on mobile ads have been made by mistake. I have been culpable if I can say so myself! With the optimistic trend that mobile advertising spends will increase by 10-fold by 2015 (source: mobileSQUARED), this can certainly be improved through mobile optimisation of websites and marketers’ & publishers’ commitment to invest in “responsive” designs – laying the ad out differently depending on the device it’s been viewed on.

Mobile advertising has small real estate and very different consumer context compared to other channels. It is important to note that mobile is not a platform for brand advertising as many marketers would like to assume. Mobile ads should be used when there is a specific call-to-action – a discount, a deal, which is relevant to a consumer’s daily life and contextually valuable. This makes mobile ads best suited for businesses that are within consumers’ habitual travel patterns and less so much for brand-building campaigns.

Native advertising: Time for a new mobile ad format. 

Native advertising is not new or clever; many brands have been creating content that is part of an experience for many, many years. Although many have said that Facebook’s Sponsored Stories and Twitter’s Promoted Tweets paved the way to the concept of native advertising (online), I dare challenge to say Google was the pioneer of native advertising, using sponsored links like organic links on the search result page. Increasingly in the last couple of years, many other content discovery sites have offered native advertising – e.g. Foursquare’s promoted locations to iTunes’ promoted playlists.  Forbes, BuzzFeed and Quartz have been early-adopters in native advertising – and they have extended native advertising programmes to mobile. The user experience is seamless, the placement of native ad positions is in-stream and similar to what users experience on Facebook and Twitter.

Are native ads the key to solving the mobile advertising riddle? 

The native advertising model is perfect for mobile. At best, it is a trick that puts ads in the place where trusted editorial content lives. By making advertising part of the content discovery process, it can overcome the challenges around smaller screen and capturing the desired user’s attention span. The future of mobile advertising is hitting the sweet spot of quality content and proper placement which is customised for the user.

Regardless of whether native advertising becomes the renaissance digital mediates are predicting, it has become almost impossible to talk about native advertising without sounding like a jerk. What I know is, the timing is ideal for publishers to offer marketers an opportunity for engagement with their audience through mobile with the use of this exciting new ad format: native advertising.