Publishers See Rising Premium On Mobile Advertising

philbarrettThe Sell-Sider” is a column written by the sell side of the digital media community.

Today's column is written by Phil Barrett, senior vice president at Purch.

Mobile advertising is growing faster than all other forms of digital advertising, predicted to reach nearly $42 billion in the U.S. by 2018.

There’s been a general “premium” on this relatively young channel, as the inherent qualities of mobile offer more advanced opportunities for targeting and direct action and have proven to engage users in a way that desktop just can’t. These distinct qualities require a different approach from publishers with regard to creative – ads that become a seamless part of the user’s experience perform better.

This, coupled with the increased demand for mobile ad space, will only raise the premium on mobile, as advertisers will be willing and able to pay more for this limited inventory because their work will ultimately produce a better ROI.

Higher-Quality Advertising

Demand for mobile advertising is surging, yet the smaller screen necessitates a cleaner and less distracting presentation, meaning fewer ads. Publishers are learning a lesson from desktop days – the same approach cannot translate to mobile, as crowding its small screen with too many ads kills the experience.

This limited inventory will create a noticeable shift toward higher-quality ads that actually enhance the user experience. While some of the best-performing desktop ads are often interruptive, it’s the opposite on mobile. Ads on mobile must be part of the overall experience and must be integrated with content, otherwise users will quickly abandon a site or app. Better creative and integration, and a much more seasoned approach to serving the user, will also increase the value – and cost – of mobile ads, as they will be increasingly accepted as a part of the mobile experience.

Mobile ads also are often less complex in design – not only because of the smaller screen, but also because of load time and the potential impact on data allowances – which is an important factor in retaining users. Google reports 70% of smartphone users switch sites due to lagging load times.

There are clearly different standards for mobile advertising and a lot of the responsibility falls on the publisher, which has an equal say on how the ads perform by how they integrate the placements within the mobile web or app experience. Making mobile ads more native and integrated within the experience lends itself to developing better creative to take advantage of these ad spots. When done right, the options for interacting with consumers on mobile are limitless and will raise the premium on mobile advertising even more.

Beyond Traditional Interactions And Data

To truly make mobile advertising the most valuable form of digital advertising, publishers and advertisers are beginning to think beyond the traditional ad unit, incorporating more innovative ways of interacting with their users. Advertising on mobile already offers more accurate geolocation targeting and tracking data, with a user’s device ID acting as a kind of “super cookie” in tracking and predicting user behavior.

These data points are being leveraged to create more relevant and personal ad experiences, which leads to higher conversion rates – especially on mobile apps, where audiences tend to be the most engaged. This presents valuable opportunities, one of which is for retailers to insert themselves into the shopper journey between online and offline to offer users a better price or value at their store than at a competitor’s.

We’re also in the early days of incorporating direct actions that go beyond the click, such as “click-to-call” and “3-D touch” for quick action. We could also see fingerprint scanners and home buttons being leveraged to enable things like a universal mobile wallet for one-click checkout and opt-ins (and -outs) to loyalty and reward programs. Deep linking and other features aimed at removing friction between an ad and purchase are being developed to support a conversion exactly when a consumer wants and with little effort.

Are We There Yet?

The future of mobile advertising is still a bit hazy, although one thing is for sure: It’s going to continue to evolve to better leverage the inherent advantages you get with the context of mobile (location, Bluetooth, RFID etc.), which should lead to experiences and creative that serve users. That would be a nice paradigm shift from today’s desktop experience.

Follow Purch (@PurchGroup) and AdExchanger (@adexchanger) on Twitter

 

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