Mobile Matures: Online Ads Can Now Follow You Home

If convergence is the Mother Lode of Internet Value, cross-device marketing is the key to unlocking it. The problem is that the key has been pretty ineffectual until recently.

Convergence is the notion that access to the innate consumer planted inside every human can most effectively be gained by synchronizing use of every channel, platform and medium collectively. As is so often the case, that is easier said than done.

Tracking people on their mobiles turns out to be more difficult than the plot line of your average Hollywood thriller might lead you to believe. And assuming you are able to crack that positioning code, determining how best to market which services to which consumers at which moment is a veritable Rubik's Cube of statistical probability.

Needless to say, where there is a profit to be made, a way forward can usually be found. The alliance of technology and marketing has produced targeting models that enable advertisers to use triangulation to determine whether data from different sources can be combined to eliminate irrelevant possibilities and successfully identify the 'right' person in a given locale thanks to the similarities in usage and content. This provides the user with the ability to track from laptop to desktop to mobile to tablet.

Does this raise worrisome questions about misuse of the technology by hackers, foreign governments, organized crime and even poorly supervised domestic security services? Well of course! In all likelihood do we, as a society, give a hoot? We seriously doubt it. As long as the tracking is relatively unobtrusive and well lubricated with discounts, promotions or similar deals, experience suggests we will be more inclined to squeal giddily than to rue our fate. The challenge for marketers will be to keep the offers fresh. Repetition is profitable for businesses but becomes boring for consumers. Challenges to the further deterioration of privacy is more likely to come as a result of ennui than of indignity. JL

Spencer Ante reports in the Wall Street Journal:

Advertisers already know what people are up to on their personal computers. But understanding their online whereabouts on smartphones or tablets has remained elusive.
A number of companies are trying to better pinpoint mobile users' online activity with new software and techniques they say could help advertisers track users across devices.
By harvesting cross-screen identities, the ad industry could serve ads to mobile phones based on the interests people express when surfing the Web on their PCs.
"Every retailer is trying to figure out cross-platform activities," said Jeff Warren, vice president of mobile and online partner marketing at online travel company Expedia Inc. EXPE -2.12%
Right on Target

Firms are employing a number of new methods to better serve more relevant ads to groups of people on mobile devices.
Look-Alike Modeling
Ad-technology firms like Tapad and Exelate analyze mobile and e-commerce data to create segments of people who are likely to buy certain kinds of products based on similar demographics, online usage and purchasing behavior.
Day-Parting
Google can serve mobile ads during specific days and times of the week, so ads can display phone numbers when stores are staffed, for example, or promote certain brands at night when people are more likely to use tablets.
Cross-device Marketing
The next frontier in advertising is identifying multiple devices used by one person. Drawbridge's algorithms try to anonymously match devices by triangulating ads requested by different devices across similar times and locations.

The emergence of cross-screen marketing is one of several new forms of technology aimed at solving a fundamental problem with mobile ads: It is harder to target people on smartphones than on PCs.
On the desktop, targeting is done by "cookies"—small software programs installed by Web pages on a user's browser to monitor online activity. But cookies generally don't work in wireless applications, where users spend much of their mobile time and money.
Users who aren't served relevant ads don't act on them as often, making the ads less valuable.
U.S. mobile ads grew to $4.1 billion dollars last year from about $1.5 billion in 2011, according to eMarketer Inc. But they accounted for just 2.4% of all U.S. ad spending. The new technologies aim to help further close that gap.
Last summer, Expedia began a trial with mobile ad technology provider Drawbridge Inc., which uses a "triangulation" method to try to figure out when a mobile user is the same person as a desktop user.
Drawbridge sends cookies to desktop and mobile browsers to track the ads being requested by the devices. If the patterns show enough in common—using the same Internet address at similar times, for instance—the company figures there is a good chance they are from one anonymous user.
That level of detail is important for Expedia, where the bulk of mobile bookings come in the days before a weekend, Mr. Warren said.
When delivering deals Expedia hopes will trigger a booking, he said, "Knowing when you are on your mobile phone is really key."
Drawbridge helped Expedia deliver ads to a large pool of mobile users it believed had recently visited the travel service's desktop website.
Expedia sent travel offers to people viewing travel guides at night in certain cities on mobile devices associated with the desktop users. If a person clicked on the ad, it would prompt the user to download or use the Expedia app to book the transaction.
"We have seen a direct positive relationship between spending on app downloads and someone consummating a transaction," Mr. Warren said. "Technologies like Drawbridge give me a bit of a prayer but it is still early days."
Major technology companies are also working to improve targeting of mobile ads while improving protection of user privacy.
Apple recently introduced a tool that lets developers anonymously track users, phasing out use of the old device ID that some privacy advocates said could be coupled with enough data to identify people. The new tool lets people limit ad tracking or reset the advertising identifier on their devices.
"It creates a level of comfortability for advertisers," said Paul Gelb, head of strategy for ad server MoPub Inc.
Facebook Inc. FB -0.30%doesn't provide data on its members to advertisers. But it does make it possible to send ads to actual people across their devices, which has fueled ad sales, said Gokul Rajaram, Facebook's product director for ads.
Mobile ads accounted for 23% of Facebook's revenue in the fourth quarter, up from zero six months earlier.
In February, top mobile ad provider Google Inc. GOOG -0.25%rolled out a new program called "enhanced campaigns" that lets advertisers tailor their ad bids by multiple locations and specific days and times of the week all within one campaign.
Tapad Inc., a company that delivers ads across devices, aims to improve mobile ad targeting by analyzing usage data from smartphones, tablets and PCs to create "look-alike" models of millions of people who may be likely to buy certain products.
It does so by identifying the apps users have downloaded, the mobile websites they have visited or items they've bought within a mobile app, CEO Are Traasdahl said.
It then compares those findings with data advertisers give Tapad about the online behavior of prospective and existing customers.
When a person has viewed a Web page for a particular device several times, for example, Tapad considers that a sign of purchasing intent. Tapad will then pool other people who have shown the same purchasing intent and sell that segment to an advertiser.
Tapad works with 75 of the largest U.S. advertisers, up from zero 18 months ago, Mr. Traasdahl said.
"What we are seeing now is you can really start doing advanced targeting on mobile devices," Mr. Traasdahl said.