[LINK] Smart phones and web privacy

[stephen at melbpc.org.au]

Perhaps somewhat surprizingly, and despite ad-industry attempts such as 
http://www.youradchoices.com it appears that smart phones may be better
at protecting your online privacy than normal (PC, tablet etc) browsing.

Smartphone Ads and Their Drawbacks

By RANDALL STROSS NYTimes.com Sep 15, 2012 
 
AT two inches wide and one-third of an inch tall, a display ad shown on a 
smartphone isn’t much of a canvas for a creative marketer seeking to 
promote a product or service. 

That’s one reason smartphones are not working well as a medium for many 
advertisers. 

The evidence is telling: advertisers are willing to pay much more to 
reach a thousand pairs of eyes gazing upon a computer or tablet than a 
thousand pairs looking at a smartphone screen. 

“Size absolutely does matter,” says Christine Chen, director of 
communication strategy at Goodby Silverstein & Partners, an ad agency in 
San Francisco. “If you look at the real estate available on a smartphone, 
it’s really sad compared to not just banner ads on the Web, but also to 
TV, print and outdoor advertising.” 

Size isn’t the only problem. 

Advertisers are also limited by what they can find out about smartphone 
users. It’s not technically possible to use cookies with smartphone apps 
the way it is with a browser. On the Web, publishers typically record 
users’ actions so that advertisers can make an educated guess about a 
user’s identity and interests. 

“What makes Web ads so attractive to advertisers is the ability to track 
actions and optimize accordingly,” Ms. Chen says. Because a smartphone 
cannot use the same technology, she says, “your ability to track and 
optimize is much more blunt, or in some cases nonexistent.” 

These limitations depress demand for smartphone ads and lead to low 
prices. A banner ad on a Web page that costs $3 to $5 for every thousand 
impressions may cost only 75 cents or $1 for a thousand impressions on a 
smartphone, Ms. Chen says. 

Another reason advertisers don’t value smartphone ads highly is that 
users tend to lack a receptive mind-set when using their phones. “It’s an 
activity you do for a short burst of time,” Ms. Chen says. “It’s very 
functional.” That is not a good time to try to make users stop what they 
are doing and give their attention to an advertiser’s message. 

Ms. Chen says she tells her firm’s clients not to bother advertising on 
smartphones. 

Jeff Lanctot, global chief media officer at Razorfish, says context is 
much more important on smartphones than on larger devices. “Requesting a 
marketing-related action while looking at wedding photos would be 
considered intrusive,” he says, “but while playing a game, it might feel 
very natural.” 

Mark Himmelsbach, director of digital strategy at BBDO North America, 
sees some potential uses for cell phones as an advertising medium, but he 
says most marketers take care to limit the size of ads on phones “so as 
not to irritate people.” 

“Mobile ads are relegated to a tiny portion of the screen and are often 
invisible or ignored by consumers,” Mr. Himmelsbach says. 

Phones do have some benefits, like the ability to serve up ads based on 
location or to integrate advertising into apps that are used for 
something else, he says. But of all the possible options, he 
says, “mobile display ads give us the least amount of creative 
opportunity.” 

Location-based mobile advertising, known as geofencing, is directed only 
at nearby prospects, and it has proved to work well, says Doug Ray, 
president of Carat North America, a media planning and buying 
firm. “Knowing where you are geographically and delivering a contextually 
relevant offer has been effective in driving conversions and sales,” he 
says. “Geofencing is not possible with a desktop PC.” 

Consumers, however, don’t necessarily want to be reminded that their 
phones are location-tracking devices for advertisers. “A mobile device is 
one of the most personal forms of technology we have,” Ms. Chen says. 
Location tracking is perfectly legal but apps ask users’ permission 
during installation. 

Using the Web on a desktop, laptop, or even a tablet, isn’t likely to 
feel as tightly bound to our personal selves. Much Web content is mass 
media, broad in reach, and that’s good for the advertising business 
because users do not treat the accompanying ads as an intrusion into 
their personal space. 

“Media consumption is less personal than, say, a Facebook page, a text 
message or a phone conversation,” says Mr. Lanctot of Razorfish, “and so 
historically is better suited to be ad-supported.” 

MR. LANCTOT mentions three companies that are doing well with mobile 
advertising: Pandora, Twitter and Foursquare. But each of these is 
fortunate to be in a business where it doesn’t have to contend 
with “banner blindness” among users. 

Pandora inserts audio commercials into its music stream, Twitter puts 
sponsored ads into tweet streams and Foursquare lets advertisers try out 
geofencing. 

“The advertising on all three is a very natural part of the user 
experience,” Mr. Lanctot says. “It’s not intrusive.” 

What doesn’t make his list is the smartphone’s minuscule display ad. 
Digital advertisers working with smartphones must somehow make their ads 
large enough to be noticed, but not so large as to be an interruption. 
And they must be chosen to match a user’s interests, but not so closely 
as to induce a shiver. 

Randall Stross is an author based in Silicon Valley and a professor of 
business at San Jose State University. E-mail: stross at nytimes.com.

A version of this article appeared in print on September 16, 2012, on 
page BU4 of the New York edition with the headline: Advertising in 
Lilliput: A Problem for Smartphones..

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Cheers,
Stephen