In the following video, senior technology analyst Eric Bleeker looks at one of the most struggling areas in technology: mobile advertising.
Three years ago, as mobile was exploding, everyone wanted a piece of the market. After all, soon everyone would soon have a smartphone in his pocket, how could this not be the next tech gold rush? Google (GOOGL -1.82%) bought AdMob and Apple (AAPL -2.19%) bought Quattro and created its iAd agency.
Yet enthusiasm for mobile advertising has waned. Two companies that specialize in the field, Velti (NASDAQ: VELT) and Millennial Media (NYSE: MM), are two of the worst performing stocks across the past year. Overall, smartphone advertising rates stand at an RPM -- the price paid per thousand page impressions -- of $1.31, according to eMarketer, which is well below the $4.70 average on desktops. Apple quickly moved the minimum price for iAd campaigns from $1 million down to $100,000.
Eric notes that all hope isn't lost. While mobile advertising in apps and banner ads might be in trouble, mobile search advertising could be in comparable good shape. Google recently launched its Enhanced Campaigns program, which will spur more adoption of mobile search advertising.
Yet, in the end, Eric notes that the rise and fall of mobile ad companies is a warning sign. Trends in technology are difficult to predict. A can't-miss technology like mobile and smartphones sparks as many losing ideas around it as it does winning ones.
To see his full thoughts, watch the video.
