What’s Slowing the Shift to Mobile?

When it comes to large brands, advertisers have yet to invest heavily in the mobile medium (compared to online, print, and TV). Although mobile advertising is a growing industry that has achieved year-over year growth rates in excess of 50% since 2011, with an estimated spend of nearly $5B in 2013 alone, the fact remains that the majority of agencies have not invested a proportionate amount of their media spend into mobile.

According to Mary Meeker, a partner at Kleiner Perkins, 12% of total media consumption time is spent on mobile, but only 3% of advertising spend occurs on the platform. This represents a huge opportunity for mobile ad networks to truly differentiate themselves, and for ad buyers to emerge as the early adopters of mobile, reaching more than 220 million monthly mobile users.

Why, then, has mobile been so under-invested in as an advertising platform? After all, it is a growing industry that has proven to be effective in engaging consumers, and there are clear first-mover advantages to innovating in the space. The sheer number of eyeballs, the fact that most mobile users are on-the-go and ready to buy, and the ability to target at granular levels makes mobile a compelling platform to reach consumers.

We have identified three primary reasons for advertisers’ hesitancy regarding mobile ad investments, and methods by which ad networks can address them.

  1. Age. The majority of mobile ad networks are young. The players are new to the game, creating uncertainty regarding what the best use of mobile dollars entails. As a result, the majority of agencies have been flocking to large, established name-brand networks such as Google’s AdMob and Apple’s iAd, requiring smaller ad networks to prove their worth and expertise. The catch is that many of the big guys specialize in desktop advertising, and are not necessarily experts in the mobile space. Getting agencies to trust that ad networks’ performance can be tracked and measured, and that brands’ messages can be effectively delivered on the small screen, is just a matter of time as the industry matures.
  2. Lack of differentiation. In the past, there have not been many differences between the various ad networks at a high level (they all serve ads through third party partners or their own publisher networks). This creates confusion as advertisers attempt to choose suitable partners to work with. In addition, many of the mobile first ad networks are siloed in their approach, offering only creative services or banner-based ad offerings, which limit their scope of work and ultimately forces agencies to work with multiple partners to develop and deploy their mobile ad campaigns, driving up costs. However, ad networks have started to become increasingly differentiated: for example, Aarki offers free creative services and superior targeting ability, focuses on mobile rich media, and leverages years of expertise in the mobile space to help advertisers.
  3. Targeting and KPI tracking capabilities. While desktop ads utilize cookies to track users across websites and ads, mobile browsers and publishers do not yet have an analogous method of tracking consumers for optimized campaigns. However, mobile does allow for demographic, location, behavioral, and device targeting, all of which are highly valuable touch points. It seems that mobile has evolved so quickly that the level of understanding around its targeting capabilities has not caught up. Furthermore, with tracking of KPIs at the forefront of brand’s mobile initiatives, it is critical that ad networks educate their partners on how success is measured on mobile. Many of the parameters are actually the same from desktop to mobile: tracking clicks, engagements, time spent, social sharing and more.

Going forward, mobile ad networks must prove their effectiveness, differentiate themselves, and implement reliable tracking solutions in order to earn advertisers’ dollars. Our approach is to provide a holistic offering to our agency partners in the mobile space: from creative, to serving, to targeting and real-time tracking. The consumers and technology are there; as agencies become more comfortable with mobile, the advertising dollars will follow.

Topics: Industry News