Advertiser demand for display mobile ad inventory is finally catching up with consumer habits. Display ad spending on mobile is expected reach parity with desktop this year and account for three-quarters of display ad spending by 2019, according to eMarketer. But are users getting left out of the equation?
Interstitials clog slideshows; banners are placed right where your thumb hits the screen to scroll down an article (infuriating); pop-ups with minuscule close buttons placed right next to the button that closes an entire article; weak (or non-existent) disclosures make it nearly impossible to tell if you’re clicking on editorial or branded content. Whether it’s ads plastered all over or clunky formats, consideration for the user experience often seems an afterthought.
Publishers are trying to figure out how to monetize this huge influx of mobile traffic. Advertisers are scrambling to reach mobile audiences with effective ad formats and measure results. Both are grappling with the momentous shift of users consuming content in-app versus on the mobile web.
This is not to say all mobile content experiences are terrible (leaving aside the click-bait types of sites multiplying like rabbits all over social network streams and content recommendation engines) but as a reader, it can feel like the scientists have lost control of the experiment.
To get perspective from both the buy and sell sides of the industry, I spoke separately with Rob Rasko, who heads 614 Group, a consulting firm that advises publishers on digital monetization strategies, and Joe Laszlo, a mobile industry veteran who currently serves as Senior Director for the IAB’s Mobile Marketing Center of Excellence.
Both tend to agree that the current state of mobile advertising leaves a lot to be desired, but both are also bullish on the future. Here’s what they had to say.
Publishers Still Adjusting, Facing Technology Challenges
“This is probably a good time to get back to basics,” acknowledged Rasko. Publishers are seeing some 40 percent of their audience come from mobile, and, Rasko says, that in many ways the current state of advertising on mobile speaks to fear. “This is still a relatively new medium. Publishers realize they don’t have a great strategy for how to deal with mobile monetization, so the approach often is to throw more ads at it.”
Technological Hurdles: Publishers face new technical challenges on mobile as well, Rasko points out. The biggest being designing pages by device to deliver page templates that will enable ad serving that looks great on all screen sizes. In the app space, making changes to accommodate advertising on-the-go doesn’t work like it does for desktop, he adds. Publishers have to think in advance and develop a strategy for incorporating and effective ad monetization strategy before shipping their SDKs.
Need For Consistency From Social Referrals: For publishers, a big shift is in the way people are getting to sites, Rasko explains. We used to search for a site or type the URL directly. Now publishers are getting traffic from social media. Publishers that are managing this shift well are creating a match between the link on social and the content on the site, he says, naming Buzzfeed and Quartz as two publishers that are doing this well. “There is consistency in the experience and thinking that goes into this that rewards publishers that are nimble managing the ways they follow-up the user experience from referrers.”
Contextual Relevancy Is Becoming More Important: We’re going to see contextual relevancy play a much greater roll with native and in-stream ads, he says. Ads better be relevant.
Fewer Ads Per Page: We will begin to see fewer ads on the page, predicts Rasko. With native, you can have one ad to a page and monetize it ways that make sense for both publisher and advertiser, and relevancy, here is also key.
Advertiser Growth Reliant On Better Formats & Measurement
Laszlo didn’t disagree that there is a bit of an anything goes feel to mobile right now, but he says, standards will emerge over the next year that will help bring more order and better results for advertisers and better experiences for users.
“Mobile is fast becoming the number one means for connecting with content online, so we need to make sure that this growth is sustainable and that advertising shifts with this movement,” he says. “There are two areas where this will happen: creative and measurement.”
Still A Lack Of Data On What Works: Laszlo says that one problem for advertisers in these early days is that there is still not a wealth of case studies and research on mobile that can offer benchmarks for ad performance. Advertisers, like publishers, are still in “throw it at the wall and see what sticks” mode. But, Laszlo expects creative to improve as more research comes out from the industry about what’s shown to be successful at scale.
Need for More Inspiring Ad Formats: “On the creative end, we need ads that work well and inspire ad shops to create ads that are engaging,” explains Laszlo, “with the two big growth areas in mobile right now being video and in-stream native ads.”
The IAB’s standard ad units were designed for desktop, and they don’t work very well when screen sizes vary dramatically. It is currently reevaluating ad standards that, won’t be based on pixel counts and will look good on all screens. Lazslo says the IAB is hoping to come out with these new ad units by the end of this year.
Laszlo pointed to the IAB’s Full Page Flex ad unit as the earliest effort to consciously create an ad for different screens sizes. “It’s still early to know if we can do more with things like responsive design,” he says, “The challenge is in getting the technology to catch up with the ideas.”
Big Advances Coming In Mobile Measurement: The industry has made great strides in measurement in the past couple of years, but there will be big moves in this area in the next year, says Laszlo. For example, companies including Google and Facebook have been working to solve issues around cross-device and offline conversion tracking as the industry has been forced to move from cookie- to identity-based tracking mechanisms.
The standard for selling ad based on impressions viewed rather than impressions served on desktop was released last year. However, a viewability standard on mobile remains a big challenge. Desktop viewability technology doesn’t port well to mobile, and the IAB understands there is a lot of confusion around mobile viewability. “We need appropriate technology solutions before we can set appropriate viewability standards for mobile. We will be doing more on this this year,” says Laszlo.
A Renewed Focus On Long-Term Customer Outcomes
In this time of rapid development, whether you call it fundamentals or best practices, Rasko and Laszlo, both separately pointed out a need for the industry to keep the basics in mind. Simple things like frequency capping can make a big difference in the near term, says Laszlo.
One area where the ecosystem is looking shifiting their focus on lasting user satisfaction is app install and engagement ads. Laszlo says advertisers and vendors alike are turning their focus on long-term customer acquisition for app developers, and away from the quick download, Laszlo points out. The market is still sorting out which vendors are doing it right, he says, but marketers have awoken to the fact that a one-and-done approach to app install ads is not produce long-term viability.
The same should be said for the quick click. Scoring clicks by placing ads in ways that make it hard for users to scroll without pressing an ad is also not the way to move the ecosystem forward.
It was encouraging to hear Rasko and Laszlo both express a healthy dose of realism and optimism. Despite current growing pains and ongoing technological challenges, both suggest fairly significant advancements are ahead in the coming year from both the buy and sell sides that will make the mobile advertising ecosystem healthier for everyone – users included.
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