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Mobile ads are a curious phenomenon, they're surprisingly ubiquitous on the so-called Mobile Web, with the market leader AdMob measuring ads served in terms of billions, yet most smartphone owners will rarely see them. More and more, with the iPhone's Safari, S60 Web and of course Opera Mini, the web served up onto smart mobile devices is the full web and not a mobile version, which means that the ads served are the original full bandwidth banners. Which a smartphone owner is extremely unlikely to click on, with time and bandwidth so precious.

The concept of getting online with a mobile phone is catching on though, with most 'dumb' phone users now aware that they can get access to at least part of the Internet, albeit usually through their operator's default portal page - but it's a start. Once past the portal's doors, users are experimenting and exploring, which is good for mobile ad suppliers, but often unwittingly using transcoders such as Skweezer, which is bad for an ad company, especially if the portal or transcoder supplier decides to put its own ads in place of the original ones.

The mobile industry can't actually avoid advertising - it's a cornerstone of modern life across all media, but at least there's one way in which adverts can potentially be interesting and relevant. With more and more handsets coming with GPS and with mobile apps such as Google Maps for Mobile pioneering pseudo-GPS functionality based on cell tower locations, it's almost a given these days that your mobile has the potential to know its own location on the Earth. What I'd like to see in phones and smartphones is more pervasive location awareness, so that every application from Web browser to Map client to Music player can tie in to relevant local advertisers (e.g. the somewhat cliched "It's lunchtime, why not stop by Dominos, 2 streets away, where there's a 2-for-1 offer on" or "You like The Damned - your local HMV has their greatest hits for only £4.99").

There's still a huge grey area in the overlap between 'mobile web' and 'full web' though, not helped by the convergence of handset hardware and software functionality. It's a brave company that commits large investments to mobile advertising in such a confusing climate, but it's a wise one that invests some time, effort and (yes) money and which keeps its eyes well and truly on the mobile world.

I think the only way mobile ads could work is if they follow the current contextual ads like Google currently does. This means they need to be relevant to the user's location and possibly what a user is doing. Walking down the street with your phone constantly ringing to tell you that a shop you're walking past has a coupon available will only irritate people.

I could see this working more like: I'm using my phone to look up movie times or the location of a restaurant. While I'm looking, I would get ads for nearby movie theaters showing the movie I'm interested in or nearby restaurants that serve the same type of food. If I'm just looking up something generic, like the nearest hardware store, the ads can be more sales-like, showing discounts, sales, or coupons.

Any ads sent to a mobile phone must not use any minutes or data time from a user's account. I'm paying the bill for my phone; I don't want some company bombarding me with ads while also using up my minutes.

Alternatively, the phone could be subsidized by various ad agencies; I allow ads to appear on the phone but I don't pay for minutes (or something like that). I know this idea didn't work a decade ago when computer companies were giving away free computers to people willing to look at ads but maybe the time has come. For example, for people who don't need a complete smart phone and just want something in case of emergencies, an free phone is probably ideal. They don't want to pay for minutes they aren't using but don't want to worry about pre-paid minutes expiring. And as they realize they aren't paying for it, chances are they will use the phone more and more.

Finally, ads shouldn't appear to be normal calls or text messages. I used to receive SMS messages from a phone company and it was very irritating because I would think someone was actually sending me a message. If ads are being sent to my mobile phone, then the alerts need to be different from my regular ringers. I don't want to be awaiting an important call then stop everything to answer my phone and find out that it's just another ad.

As always, the key is to present advertising that the consumer finds helpful and not annoying. As an example take the following:

I'm in the city (Montreal) with my wife and we decide to have dinner. Specifically, we decide we want French cuisine. I pull out my iPhone and bring up Google maps and search for French restaurant on Google. If an ad pops up for Domino's Pizza and interrupts my searching, that is a bad ad and will only serve to annoy and frustrate me. If an ad pops up for Restaurante Bonparte then I could be interested and click on it.

There are three keys to enable the good scenario listed above:

1. location-aware devices
2. contextual ad platforms
3. trust between the provider and the consumer

The trust link is the single most important piece and again best demonstrated with an example. If a consumer searches for a drug store to buy some condoms and is shown some ads for various brands, that is fine. But if a day later the same consumer finds a flood of spam for various enlargers and fake Viagra, that is bad. Because it means that somewhere in the chain between the consumer and the ad someone sold their personal information. Now the consumer will suffer for that and as a result turn their anger on the company on who's platform it occurred because they can't strike out at a spammer in Russia.

The biggest difference between print/TV advertising and computer/mobile advertising is the potential for advertisers to link activities and behaviors with specific consumers. Like any double-edged sword, this presents great opportunities for more effective advertising but also more opportunities for misuse of private data. If consumers find the only "benefit" of these new mobile ads is increased spam, additional loss of privacy, and stolen personal information they will rebel and the mobile adverting will fail.

So it is critical that the advertising, marketing, and platform industry understand the seriousness of this and work together to take as many steps as possible to ensure and reinforce customer trust. See the Beacon fiasco for an example of how not to foster trust in the relationship with your users.

Google has all this figured out already and is putting the pieces in place to dominate this market while others will be left scrambling.

What could bring this all crashing down? Ad banners serving malware and viruses. Granted, the real root of this problem are the unpatched vulnerabilities existing in almost every web browser and operating system. But the initial reaction of advertising platforms such as doubleclick that "it's not our fault" and "we can't control what images our partners upload" is the most damaging answer for their business.

The reason that answer is damaging is because customers will punish whomever is closest if their machine gets compromised in such a situation. First on the firing squad will be the product that was advertised. Second in line is the website that showed the ad. Third in line will be the platform (browser/OS) they viewed it on. No where on this list will be the Russian hacker who actually wrote the ad because they are invisible in the equation.

If customers lose confidence in the security of advertising they will increasingly turn to solutions such as Firefox's AdBlock. This will prompt advertisers to find more ways of forcing ads past the filters in increasingly annoying ways. Which will only serve to turn off customers more and drive the entire online advertising business into a death spiral. This means advertisers and platforms must take the stance now that they need to get involved and take responsibility for the system on which they are making money. It may be difficult and cost more money in the short run but it's better than losing everything in the long run.

Advertising is the wrong way to think about it. Like a great website, mobile ads need to be a conversation. Let's be honest, advertising is for the most part an interruption. One we tolerate only because we get something back from. We need to turn that model around and make the "advertisement" an "enticement" instead, especially in the mobile space where people are accustomed to paying extra for incoming calls or other bandwidth usage.

Mobile enticements should be based on a user request model. "I need info on restaurants near where I am." or "Show me shoes within 2-blocks". Including ratings and reviews and you have a way of communicating with the user, without disrupting them. Mobil ads need to be structured to be useful in ways that traditional media ads aren't. No more shouting into the darkness and hoping someone will respond. Targeting the user with valuable information and other inducements to buy such as coupons.

This is how mobile ads need to evolve. Beyond advertising into something more subtle. Throwing banner ads, videos or other traditional ad types at them will never be tolerated by the mass of users. Delivering additional information, such as paid ads when users request the address of the local dry cleaners, competing coupons, or information such as, "You've requested information on City Dry Cleaners. Did you know that Urban Cleaners has a higher ranking based on consumer reviews?", or even paid sorting like Google, where the paid responses come up first.

Ads and services need to be inextricably linked, not tacked on at the beginning or end. The need to be useful and timely, and the delivery system needs to learn what the user wants to see. "Was this additional information helpful?" This is all possible with the right implementation of mostly available technologies. The problem is advertisers need to rethink the approach. Not what can we get away with, but what can be welcomed, what can be useful.

As a longtime smartphone user, I'm used to paying a premium for handsets and subscription services. But as the masses widely adopt smartphones and/or services, advertising will begin to play a bigger role on these mobile devices. Consumers want free and low-cost mobile services, and advertising is the most logical way to achieve this. But ads that are unrelated to what users are 'doing' will be extremely annoying on a mobile handset.

Application and service providers are a unique position to make ads less intrusive and more useful to their customers than traditional web browser ads. The key to this is hyper-targeting the ads to users based on location and the user's recent and probable activity. 

For example, if I'm searching for "Pizza," I sure wouldn't mind seeing a coupon code for a nearby restaurant at the bottom of my cell phone's screen.  Chances are, I'm ordering a pizza in the next few minutes. Since the services can easily pinpoint my location, they can easily serve up an ad that's relevant to me. 

To make ads less annoying, consumers will have to give up some of their perceived privacy if they want relevant ads. The ads will also need to be relevant to more than just web searches. One way to do this is set up an opt-in program that allows ads to be served based on recent call history. When I'm shopping for a new car, I actually seek out car advertisements.  I would welcome ads that displayed the best lease deals if the services could determine I was shopping for a car, based on the fact that I'd called several auto dealers in quick succession. 

It's difficult to multitask on smartphones. Any ad that slows down the users' ability to complete a phone call, retrieve information or browse is completely unacceptable on a mobile phone. When I'm using my laptop, there's plenty of bandwith and screen real estate to tolerate most online ads. But pop-ups on a mobile phone would seriously interfere with getting things done.

The only way intrusive ads would be acceptable is if they drastically reduce or eliminate voice and data subscription fees. Carriers know a lot about their customers and could charge a premium to advertisers to sponsor voice minutes for users that opt in to such a program. Subscribers would hear a brief ad after dialing a phone number and receive a credit of a few minutes for listening to the ad.

Sometimes browsing for information on a smart phone is like going back to the old days of dial up internet - switching between pages can be slow, images slow to load, scrolling slow and requiring a lot of clicking. Most forms of popup and banner advertising have the potential to be far more annoying on a phone than on a computer. I get annoyed at news services that have too big a header or too many flashy logos that prevent me from getting to the news headlines.

With the way some phones load pages you can be half way through reading a text headline or paragraph before a slow image load suddenly pops up and pushes your text off the screen.

So the limitations of a phone screen size and slow bandwidth and high cost of bandwidth can make mobile phone advertising quite annoying and damage the brand it is trying to promote. You have to be sensitive to how big and intrusive advertising becomes on a tiny screen.

To make it all less annoying:

- Advertising shouldn't cost the mobile phone user any money. It needs to be delivered as free content regardless of any bandwidth allowances or limits.

- Advertising shouldn't get in the way of what the phone user is trying to do unless it is a gateway to some free or beneficial content. Pushing news headlines or page content off the screen - requiring a lot of scrolling to get past a banner - loading slowly and causing a page to jump around - popping up on top of content. These are all things that will get the user cursing at the advertising and the phone provider. Banners that can fit beside or slot between content will be less annoying than banners that take up the full width of the screen and at least half the height. Advertising that shows up at the bottom of pages is no inconvenience at all and if it's related to the content it could be welcomed.

- The user shouldn't have to see the same advertising over and over again. With small screen real estate and mobile users who are in a hurry to get to content you don't want to show the same ads over and over again. You want a small amount of changing offers rather than a lot of repetitive offers.

- Forget about boring advertising. Straight out branding advertising is fine on a billboard or a TV as we can kind of tune out, but taking up valuable real estate or scrolling time on our phone is a path to hurting the brand rather than promoting it. Tiny logos are okay but big boring banners are out.

- Advertising should have something in it for the user. Special offers, discounts, freebies, contests. People are less annoyed if advertising makes them feel like they are getting inside offers that the normal phone challenged public never know about. People sign up to discount newsletters for the same reason. Give me the inside deal!

- Location based advertising that is not intrusive could be quite welcome. Any GSM or "where am I" service could include advertising links or small banners to local business offers. "The Pizza Hut around the corner from you wants to offer you a $5 pizza".

- A "special offers" section on the phone is underutilised and could be something the user visits a lot! This is not annoying at all as the user chooses to go there - as long as there are some good offers there. Cheap takeaway food, 5-10% discount coupon codes etc. where the offer changes quickly to make it seem different each time the user visits.

- I would happily sit through advertising to get some good free TV content or to get song samples or game samples. I would be interested in free games that had product placement in them - such as Tetris where the falling objects had product logos on them. Or Gears of War where you fight the Hamburgler. Give me free stuff!

- Advertising should not arrive on a users phone as a way of making a service less appealing. If you add advertising to content the user is already getting for free or under a plan they will be annoyed. An easier way to introduce advertising is to give the user a service for less or a service they don't currently get with the advertising with it. The trade off of getting something for less makes up for the advertising content.

Phone ads such as those present on Free-411, GOOG-411 and other such services are just fine for me.  I am willing to wait through a few seconds of spoken ad material to get the information I wanted for "free".  For the tiny little mobile screens, however, I think that inline text ads must be kept to a minimum.  I like the idea of presenting ad screens while other information is loading, however care must be taken that the ads themselves exhibit the following properties:

1) it doesn't cost me money to download the ads themselves.

2) the ads are not intrusive to the speed of accessing the material itself (i.e. they don't throttle my bandwidth). 

If I am paying to download an ad, I should be compensated for this on my bill.  

 Link based ads should be cordoned off so that I don't accidentally click on them.  Don't worry, if the ad appeals to me, then I will click on it because I want to, not because the link forces me to click it.  After all, who wants to be redirected somewhere that they didn't want to go? If this happens, no one will use the service.  If you think that bad ad placement has no effect on customer loyalty, just ask Google why their stock is well over 600, and why Yahoo's stock is at 23.

As everyday life converges onto the Internet, online actors will know more and more about their users – what they search for, what they buy, where they are, and so on. This will make advertisements more relevant, as advertisers are able to target the right users. Hopefully we will reach a state of peace where users expect to see interesting advertisements, perhaps even welcoming them for receiving something in return.

For example, part or all of a mobile call might be free provided that the caller first listens to an advertisement. As broadband connections evolve from wired to wireless, free minutes could be awarded in a similar way, by having the user watch or read an advertisement. Perhaps the same principle could be applied to TV.

Of course we would need a way to ensure that the user actually has followed the advertisement. This might be achieved by embedding a code in the advertisement, or by requiring user action at certain stages of the ad. The user community would likely counter with software to simulate an attentive user, so something of a race would probably ensue. Anti-malware applications are another factor – will software such as F-Secure Mobile Security prevent popups on smartphones, as “popup killer” software currently does on the PC?

Speaking of applications, one interesting opportunity is that a mobile service operator can include software in their SIMs. This would loosely correspond to a broadband operator having access to the BIOS of a user’s PC!

Mobile will not tolerate popups. They are majorily dead, but I think any attempts will result in back lash.

I see portal or social networking sites offering catered ads.

Targetting will be key- something that could even hook off GPS to identify specific location not just where the phone originates, but where it currently is.

How great would it be to be travelling and get ads/coupons/discounts for a local restaurant or shop?

Mobile advertising is poised to become a holy grail for advertisers even as it becomes a huge thorn-in-the-eye-and-ear of mobile voice and data users.    For advertisers mobile offers global, highly targeted reach.   Mobile providers will be able to use subscription information to target advertising without sharing this information with anybody, making those ads far more valuable than normal unfocused large scale campaigns.  Also, mobile users are something of a captive audience and may even be more receptive to some types of advertising when, for example, waiting in line or traffic.

Will pop-up ads become even more frustrating as they migrate to mobile devices?

Yes, as with existing online advertising it is likely that annoying formats such as "popups" and "interstitial" ads will show some of the best click through / action rates.  Although there will be complaints and probably even lawsuits, look for annoying ads to power much of the initial advertising onslaught.   Hopefully targeted unobtrusive advertising, such as small text prompts that users only click if they want, will show promise, but I think in the mobile format "ppc" advertising may prove problematic due to limited screen space.   ie ads that are not "in your face" won't get much traction.

Can the mobile industry actually avoid annoying advertisements -- and provide useful, targeted ads instead?

Eventually perhaps, but for I think initially we are in for major annoyances as popups and interstitials hit the mobile market, especially if users give these ads a chance to "survive".      Useful targeted advertising is almost oxymoronic.    Google adwords (pay per click ads) have proved the exception to the normal rule of ads running "in your face" as with TV, Radio, and some online ads.   Google is able to provide these targeted ads because they can run them during your search for information, which is happening about half the time at Google's own home page.    This huge and unique advantage will be hard to repeat in the mobile market.

That said, I think that mobile *search ads* have the best potential to bring a high quality, targeted and user friendly format.  This would simply be advertising click options presented after a mobile search query.   Many Android-powerered phones will likely have this capability and it may hold the best promise for ads users are OK to see.

How do you think mobile ads will evolve?

I think they will evolve quickly since the market will likely be measured in billions or even tens of billions of dollars very soon.    I think initially we'll see a lot of interstitials, popups, and popunders as branding plays.   These will (hopefull) evolve into less obtrusive but still effective targeted "targeted pay per click" ads, perhaps in separate screen portions that will allow users to control the advertising in exchange for reduced phone rates.

What kind of ads would you like to see?

I'd like to see "pay to view" advertising that would allow me to view and receive advertising in exchange for a reduction or elimination of my cell phone charges.    With several family phones our bill is over $100 per month, and I'd welcome any type of ad that is going to give me a significant discount on this cost.    For example I'd be happy to "sign up" to get text message advertising on a regular basis if they dropped my bill by, say, 30% or more.

What kind of ads do you want to see die?

I think ads that interfere with calls or data, such as popups or interstitials, will be the worst for users and I want them to die before they even start.   However if they are initially good for advertisers I think they'll persist.  I don't welcome those ads *unless* they pay me to view them, in which case I'm cool with it.

In summary I think we are in for a rocky ride as the notoriously non-customer centric mobile providers and advertisers work to reach our ears and eyeballs with advertising.    Targeted ads can be helpful, so hopefully they will prevail but I fear instead the early winners will be obnoxious "in your face" popup style advertising.

SkyGo did a test of mobile advertising in the year 2001, and their delighted users actually requested similar advertisements in the future.  They were testing clever "incentive-based advertisements."  ("Bring your cellphone into Starbucks and show them this message, and we'll give you $1.00 off on any drink.")

I can see that being very effective.  If I've just placed a call to 777-Film, maybe an ad offering discounts on paid-in-advance movie tickets might entice me.  For lack of a better word, "Mobile cyberspace" is still a developing virtual environment with its own rules.  People still have some flexibility about what they're willing to accept.  But what happens in the next few years may establish the rules for a generation to come.  So first mobile advertising really needs to become attractive to consumers - or it won't happen at all.

A mobile consumer is even less-interested in advertising than someone surfing the web with a desktop PC.  If I'm mobile, I'm going some place -- I'm out in the world, probably moving from one location to another.  If I've snatched a few minutes (or a few seconds) to look up some online information, advertising's going to be annoying.  The very last thing I wantis for part of my screen space to disappear behind a banner ad selling soft drinks!

I can barely read most ads on the limited pixels of my cellphone screen.  Why would you want to put a banner ad there anyway?