Mobile Advertising is hot. At CTIA, there must have been over a dozen companies all doing projects in the field (and certainly a lot more than interesting mobile services). AdMob is the most successful, the messages of other companies also revolve around contextual targeting, localization and behavioral profiling. The word on the street is, Mobile Ads are the next big thing.

I disagree and here is why.

1. Paying a reasonable amount for using a service is better than seeing a small screen stuffed with ads. This one is easy - the payment flow is already integrated into the mobile experience. Blyk has had only a modest success with a limited audience - many choose paying over watching ads. Many users actually expect to pay for mobile services, unlike on the Internet.
2. Success of AdMob and similar networks is due to demand for mobile service discovery, not advertising. Even though the company serves billions of ads monthly, their revenue is relatively modest (in tens of millions) - this is because conversion of mobile clicks into sales is not clear. People click the link to “a fun chat” or “free ringtones” because they are thirsty for more content and services, not because they are ready to make a purchase.
3. Mobile is more about communication and creation of content, rather than its consumption. Ads work on TV and Radio because they are not too disruptive (the audience is passive). Imagine if we had to listen to an ad prior to making a call or taking a picture - that simply would not work. Sure, the iPhone supports a fairly decent video viewing experience, but do people actually use it for that purpose? Not many do - the mobile context is not suited for watching a movie.

These are just some of the reasons why ads won’t work too well in the mobile realm. Let’s make some kick-ass services instead!