Monday Grok: Mobile ads, Facebook and the reluctant consumer

In just 15 short years, the Web hived off huge slabs of audience from print, but left most of the money behind. Now, in just a fraction of that time, mobile platforms may be visiting the self-same acrimony upon their desktop antecedents, and once again there's no real evidence that the money will come along for the ride.

As always, it's all being driven by some compelling numbers. According to the Financial Chronicle, “Of the time spent consuming media, more than a quarter is on a mobile device, surpassing television at 22 per cent.” The source for this factoid is a study by InMobi, released at the Mobile World Congress in Barcelona last week.

The catch is that despite this impressive statistic, (which Grok has had trouble independently verifying, btw), mobile ads are attracting only 2 per cent of the estimated half a trillion dollars spent each year on advertising.

The efficacy of mobile advertising is once again being debated at length, in part because of the impact of the Facebook IPO. Facebook's audience appears to be migrating to mobile very rapidly but so far it accounts for just a quantum of the social network's revenues.

It's not unreasonable to suggest that much of the estimated value in the IPO assumes that Facebook will succeed in monetising mobile platforms at least as well it monetises the desktop. But that's a big IF. Just ask any major print publisher anywhere in the western world about what happened when its audience changed channels.

Facebook recently announced it will insert advertising into the newsfeed of its users where they have "liked" a product — the theory being this will make it a more tailored experience and presumably that the user will be more predisposed to the message.

But in truth the jury is out on mobile advertising.

There may be any number of reasons for this, as the Financial Chronicle article explored. Form factor is one. The impact of brand advertising on a broad sheet page of a major metropolitan or national newspaper is easier to imagine than the impact of a banner ad for the same company on a computer screen. Shrink the form factor further to mobile screen sizes and you start to get the picture. Well, you start to get a much smaller picture anyway.

There's also the simple matter of consumers’ resistance. Newspapers provide vast real estate on which advertising and editorial can comfortably coexist. There's no conflict at all, and indeed in many cases the advertising is as likely to draw an audience as much as the stories — take for instance executive recruitment ads in FT or the WSJ, or this weekend's grocery catalogues in your local rag.

Most people are engaging with desktops in the workplace, so a few banners is a small price to pay for free content. But phones are different. They are personal and people react as such. Marry that to privacy and to the potential for advertisers and publishers to exploit the phone is a way that is opaque to the user and you have the makings of some seriously suspicious consumers. And suspicion is never a good place to try and start your sales pitch.

Checkout the new Highlight App for the iPhone if you want to know what we mean.

Then of course, there is the sheer irritation factor. The Financial Chronicle also references another piece of research, this time by Upstream which found, “... the vast majority of adults in the United States and Britain find banner adverts on mobile devices irritating, and fewer than one in six who surf the Web on a mobile have ever clicked on one.”

Defining 10 common qualities of great business leaders

What makes a great leader? That's an elusive elixir that has kept management colleges in the money for decades. Forbe's carries a story by August Turack, who was schooled deeply in the work of the IBM Executive School, describing how IBM came to its insights and exactly what these were.

According to Turack, one of the first things IBM did after it set up the Executive School in the 1950's was hire the Education Testing Service to identify the skills that make great leaders. This was done in conjunction with GE and DuPont.

“ETS dutifully rounded up a bunch of proven leaders and tested them every which way from Sunday looking for their common skills. The results were astounding and more than a little disturbing. As Mobley put it, ‘No matter what bell shaped curve we drew, successful leaders fell on the extreme edges. The only thing they seemed to have in common was having nothing in common. ETS was so frustrated that they offered us our money back.’”

But school founder Louis Mobley persevered and eventually came to the conclusion that successful executives didn't so much pass along knowledge and skills, but values and attitudes.

The article then outlines just what these are. In fairness to Forbes, if you want to find out you should pop over to the website and read the original, but here's the first three to get you started;

Great leaders thrive on ambiguity, great leaders stick their necks out and great leaders are deep thinkers. If you want to think more deeply about this and the other points raised in the article check it out here .

Here's why print is so dead

Finally, if you want to understand just how tragically the internet has smashed the newspaper industry, then point your browser here. The graph in the story tells you everything you need to know, but the headline basically is that print advertising revenues have fallen from $60 billion at the end of the last century or $20 billion now. You might think that $20 billion is nothing to be sniffed at, unless of course you have a cost base built on the original 60 — and that is the point of the article.

Andrew Birmingham is the CEO of Silicon Gully Investment.

Copyright © 2012 IDG Communications, Inc.

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