At the same time, there are still a number of weaknesses in mobile ads that are true for other forms of advertising, noted Jason Arnitage, principal analyst at Yankee Group. “A couple of the pain points are how do I know who I’m reaching with my mobile ads and how do I measure the effectiveness of the ad?” Arnitage said. “Because of that, analytics is one of the areas where we expect to see more activity.”
Many of the recent mobile acquisitions are of lean startups that are well-positioned to be acquired. Like other startups, these mobile startups are niche companies that offer specific features that can be rolled into comprehensive solutions, noted Melissa Parrish, research director and principal analyst at Forrester Research. “Few startups have the potential to go public; they will never have the revenue,” Parrish commented. “Operating as a small company or being acquired are the exit options.”
Pressure from clients to work with simplified solutions and fewer partners is also driving a consolidation of the mobile space, added George Bell, CEO of the mobile ad network Jumptap. “Advertisers have been consistently saying to us that they understand mobile is important but they just don’t have enough time to take a pitch from everyone and so there’s going to be more consolidation because clients want greater scale from fewer players,” Bell said.
As the mobile arms race continues, the competition to build out the best offerings will push mobile advertising to mature even further, according to Wang.
“The technology is what people are competing on and it will keep getting better,” he said. “Over the next 18 months you’ll see a greater focus on improving not only the [mobile] channel but improving the context as more data comes into the equation in terms of targeting…and whoever wins the conversion rate optimization race is going to win because that’s the metric that matters in digital.”