Around this time of year, it is our tradition to look forward to the "follow the money" trends that will matter in the coming year. But the velocity of the move to mobile platforms this past year-and the challenge of monetizing that platform-is so pressing, I thought this was a good year for this annual trends column to "go mobile" itself.
This is a problem that won't go away. By some measures I have seen, publishers are squeezing only 20% of the eCPMs (effective cost per mille) they realize online from their mobile properties. For traditional media companies, that is just throwing salt in the wounds that digital opened-going from offline dollars to digital dimes to mobile pennies. It is highly unlikely that mobile ad networks will support premium content in any serious way, and yet publishers will struggle to justify sales teams for a channel that continues to be grossly undervalued by advertisers. What is content to do?
Metered and freemium content will be a key driver. As a number of companies such as The Financial Times Ltd., The New York Times Co., and Gannett Co., Inc. have demonstrated in the last year or so, the metered approach is working as many had hoped. By limiting free use of their sites, the brands are at once identifying the core constituency and making the case to that audience that their service is worth a fee. The content itself stays open to search discovery and casual use, so advertiser interest remains high. Expect this model to migrate to mobile. In fact, the model could encourage more publishers to follow FT's lead and emphasize mobile web over apps precisely because search and aggregation are such important elements to the freemium model. It requires a big-mouthed funnel.
The freemium model, by the way, is also a perfect point of entry for the sponsor. Whether it is metered access to news or in-app purchases for games and utility apps, the freemium model restores content valuation to a market that the web skewed for a decade. This model gives your advertisers the opportunity to underwrite a day of access and, as a special add-on, an extra bit of content-and for it to mean something.
Mobile has to get beyond the banner in a hurry. The format's bad online reputation is only magnified when the scale gets small enough to fit on the screen of a device you can hold in the palm of your hand. Almost every Apple executive fleeing the iAd team last year seemed to be running from that rich media format's obvious weak link: It depended on attracting attention via the mobile banner. The full screen interstitial is polite and effective, gives full share of voice, and arguably is more engaging than similar formats on the cluttered web. On a tablet it is extremely immersive and has the potential to pay back the interruption with fun interactivity.
Mobile will go native. The coolest thing about mobile is the way it integrates user inputs that were clunky on the desktop that required a lot of web cam and microphone add-ons. People already make multimedia with their device. So marketers and publishers that find ways into that natural flow of activity will tap into a new breed of native advertising. The company Postcard on the Run, for instance, can turn a user snapshot into a branded physical postcard sent to friends. The augmented reality firm GoldRun lets brands put a virtual celebrity standup or their product into a user's camera view to play with as they like. Look for companies, especially entertainment advertisers, to provide sponsored image filters and special effects to photo and video apps in 2013.
Go shopping. The effect of mobile devices on the shopping experience is so profound that any content provider that ignores the potential to slip into this flow is missing one of the great content-commerce opportunities of this decade. Look to apps such as Lucky magazine's Lucky Shopper, which is designed to accompany you in the store. Look to how select media brands are planting their content in location-based services such as foursquare and apps designed for use during TV programs or so-called second-screen apps. Shoppers want a buddy. They need impartial, familiar information at the point of purchase. Be that resource.
Ultimately, the potential for monetizing mobile does come down to proximity. The device brings your content to the point of purchase. Publishers need to think harder, and differently, about their content in order to put themselves in the path to purchase, prove their utility to consumers and to advertisers, and get paid for the value they add.