Mobile advertising may still be a nascent market compared to online and traditional advertising, but its performance rates are often higher. For instance, mobile display ads have five to ten times higher click-through rates than banner ads online. Those numbers are impressive, but can they last?

At the IAB Marketplace: Mobile conference on Monday, the consensus was unsurprisingly yes. Mobile marketers and advertisers are pleased with how their medium has been performing in the downturn. And they were more concerned with the sucess of what is currently out there than the reach of mobile advertising as compared to online.

But will mobile advertising sucess rates continue when the novelty wears off?

It depends. Mobile advertising has a lot of advantages over online ads right now. For starters, there are far fewer ads, which appeals to consumers. But also, with such a small interface, mobile ads often use simpler images that clutter the screen less and have more impact with cellphone users.

“The need for creativity hit mobile much earlier than the PC,” says
Randall Rothenberg CEO of IAB. “The challenges of the screen size made
it apparent that you had to do something.”

Interestingly, they also appear to work better than online display ads. According to Tony Nethercutt, VP of sales for AdMob, “Mobile has at least ten times higher brand effect.” 

executive Erin Wilson, who moved to Microsoft from Verizon this year, compared Microsoft’s mobile advertising to its online ad campaigns and found some staggering numbers. Compared to Microsoft’s online ads, mobile brings in a
290% increase on unaided brand awareness, 193% more message
association, a 140% increase in purchase intent and 70% increase in
brand favorabilitly.

“Microsoft is investing very heavily in mobile,” says Wilson. “The
space is growing in leaps and bounds. So much so that it changed my job
in the middle of a recession.”

To demonstrate the growth of the mobile space, 107% more news and information was consumed through the mobile web this year versus last. But the minute size of the market compared to other media leaves room for much higher growth rates.

And a lot of of the sucess in mobile is attributable to the relatively nascent market. Already, the decline in mobile ad impact can be seen. Two or three years ago, the average mobile click through rate was 3%. Today, it is 1.2%.

And many of the capabilities of mobile — like location based advertising
and targeting — are not being utilized yet. The technology is there,
but companies aren’t taking advantage of it yet.

“Very few sites have the scale to make it work for them,” says Michael
Collins, CEO of Joule. “Brands still don’t have the ability to capitalize on value
post click.”

However, mobile marketers think that the impact of cellphone ads cannot only be attributed to the market’s newness. According to Kara Manatt of Dynamic Logic: “People aren’t used to see ads on their phones. But even when you compare mobile results to when people weren’t used to seeing ads all over the internet. The impact is still larger for mobile.”

For the better part of a decade, mobile advertising has been on the cusp of breaking through to the mainstream. But many indicators point to the fact that mobile is not just another, smaller screen. It can also be a better one.

“From what I see in the market, the economy has helped look at mobile as an accountable media and something that can be bought and infused to create incremental value and engagement,” says Gary Scwhartz, Impact Mobile CEO. “I see it being very much mainstream as a commitment.”