Earlier this month research firm eMarketer published a report that confidently predicts that UK mobile ad-spend will top £2bn this year up 96 per cent from the £1.03bn in 2013.
Gartner’s latest report on the mobile advertising market is also encouraging. The analyst firm projects that mobile ad spend globally will hit $18bn (£10.8bn) this year, up from an estimated $13.1bn in 2013.
The latest IAB report shows that mobile advertising grew like-for-like in the UK, by 93 per cent to £1.03bn in in 2013 from £529m in 2012 and accounts for 16 per cent of all digital advertising spend (£1 in every £6, compared to 10 per cent in 2012).
Almost everywhere, there seems to be optimistic mobile ad-spend growth statistics. Media agencies are quick to rally behind them. And why wouldn’t they? It's proof, if proof was needed that mobile advertising is an effective acquisition channel.
Ad-spend is a measure of growth, but it’s only an indication of the inertia of an industry that is moving toward mobile. It doesn’t tell us the reasoning that that inertia is based on.
There are areas that the mobile advertising industry needs to tackle to build a more long-term and sustainable future. In particular how ads and ad campaigns are measured. At the moment this is generally derived from page impressions and ad-clicks and optimised against.
This is way too simplistic.
At the same time, the latest IAB Mobile Snapshot Research suggests that alongside case studies to evidence work, campaign tracking was seen as the single most important area that would help media agencies to do their job better, and in the same report, 51 per cent of respondents indicated that the lack of meaningful tracking and measurement is restricting their mobile ad-spend.
We also know from looking at what happened on the desktop web that the key to growing digital investment is measurement. If advertisers can see a clear and simple view of ROI that they can trust and understand then they will invest. Look at search, email and affiliate, actually, even TV ad-spend.
The problem is that if the prevailing industry standard for measurement is clicks, advertisers put all of their efforts and confidence in measuring them as a barometer for campaign success. Clicks are a useful measure of volume but not of meaningful consumer behaviour (conversion).
Recent S4M research (that measured one billion page impressions over one month) found that up to 50 per cent of clicks are totally redundant (they don’t go anywhere). Poor network speeds, click fraud and mis-clicking (fat fingers) are to blame. That’s a real (unsustainable) smoke and mirrors issue when impressions and clicks are measured and leads to a false positive picture for advertisers.
App installs to engagement metrics
In an app-driven world, clicks are increasingly being replaced by other parameters like app-installs. Again, as a campaign metric this only tells a brand that a relatively minor outcome has been achieved.
No doubt, mobile app use has increased but how much do we use them? The Pew Research Centre in the US, found that 68 per cent of users have just five or fewer apps that they actually use at least once a week. In other words, we are happy to download apps but we don’t necessarily use them.
This means that downloading an app might be a campaign parameter, but is only equivalent to unlocking the shop door. You need to be able to define and measure active users and look at the lifetime value of that user to get a useful picture of how well your ad campaign is working and optimise budget accordingly from install to engagement metrics. How often did the user re-engage with an app? What would the brand advertiser consider to be a success?
Now that measurement is possible, serving, tracking and accurately measuring mobile spend against self-determined objectives two or three steps beyond a click, achieving a view of all the data that you need in one place to get a clear picture of waste.
It follows that with meaningful measurement in place, ROI will grow and it is where media agencies are on the measurement adoption curve that marks out the future sustainability of the industry.
Mobile advertising analytics firm Flurry also highlights an interesting comparison. In a recent study, the firm said mobile is the most imbalanced digital medium when it comes to ad-spend versus time spent by consumers with the medium, at 1 per cent compared to 23 per cent, whilst the desktop equivalent is 16 per cent (ad- spend) versus 22 per cent (time spent).
In other words, we are hung up on the growth of the mobile internet yet although there is growth in mobile ad spend, on a basic level it’s actually only a fraction of its true potential.
By Matthew Klimpke, EMEA Director of S4M.
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