The current situation of mobile advertising industry is limited by geographical position

James Herritz (James Hritz), a veteran currency expert who worked for Fox for many years, is now vice president of Tunewiki Strategy and business development. The following is the view of James Herritz (James Hritz) on location-based mobile advertising services, mainly from the perspective of application publishers. In fact, in mobile advertising business, geographical location is a key element, in other words, the geographical location to a certain extent determines the development of mobile advertising business.

Recently, according to foreign media reports, on the mobile advertising industry, based on the geographical position of advertising business can indeed make advertisers benefit a lot. The real challenge is on the mobile publishers side. In addition to the largest mobile publishers, other general localized advertising business is difficult to achieve, because most publishers in the geographical coverage (not enough to cover the full number of cities, neighbourhoods, and/or dimensional coordinates) are not sufficient to enable local advertisers to obtain the corresponding rate of return.

Assuming an active American user of 1 million, you may be surprised to find that a large percentage of active users are based on long tail locations. Perhaps the top hundreds of thousands of users come from a population center city or a designated market area, such as New York, Los Angeles, Chicago, but, after that, the number of users will increase rapidly, and the number of active users based on each geographic unit will quickly decrease. In addition, it is generally the case that an application's advertising display is based on the frequency with which each user uses the application every day.

Thus, this means that even if geo-positioning is accurate, publishers have limited opportunities to provide and match relevant advertising content to their users. Generally speaking, the smaller the percentage of active users per month in an application, the lower the advertising display rate of publishers. In other words, many applications, such as many practical applications, users may only occasionally use, resulting in a low daily active user/month active user ratio, thus unable to play a localized advertising business effectiveness.

As a result, as with most other types of advertising services, localized advertising businesses often need to reach an initial level to perform their performance on an average level. For many applications, localized activities cannot maximize their performance because they do not have adequate coverage, and they cannot promote other products, such as games, through the general CPC ads. This allows publishers to produce no more display times before they generate revenue based on localized advertising.

In this case, the localized advertising business and its prospects even sound good in theory, but in fact, only a small number of application publishers can actually get the benefit.