eMarketer Webinar: Mobile Ad Effectiveness

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Mobile Ad Effectiveness
Cathy Boyle
Senior Analyst, Mobile
August 21, 2014

Agenda
Mobile display ad performance and pricing trends
Effectiveness scorecard: Where mobile display advertising excels and where it falls short
What it will take to improve mobile ad effectiveness further
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Performance and Pricing Trends

Clickthrough rate (CTR) and cost per impression (CPM) remain mobile’s key efficacy benchmarks
1.Most marketers agree neither metric is perfect nor is each applicable to every mobile ad campaign
2.Still, tracking CTR and CPM rates over time providesinsight into marketer confidence in a particular ad format
Source: eMarketer, April 2014

The relative strength of mobile ad formats have not changed significantly in terms of CTRs
0.05%
5.0%
Mobile Banners
Mobile Rich Media
Mobile Video
Spectrum of CTRs
Mobile Social Ads

CTRs for static mobile banners have gone the way of their desktop counterparts: downward
Desktop Banner CTR Average, 2013: 0.08% (Sizmek)

CTRs for mobile rich media units have generally been above desktop norms
Expandable ad units and interstitials were top performers

CTRs for mobile social ads have been on par with mobile rich media ad units
Facebook’s mobile ads produced a better return on investment, according to marketers polled in two surveys. (Cowen, December 2013; RBC Capital, September 2013)

In-streammobile video adsgenerated the highest response rates, with CTRs up to 4.90%
CTRs of rich media ads with embedded video were five times those without video. (Pointroll, 2013)
To measure the true impact of in-stream mobile video ads, marketers also measure start rate and completion rate

Mobile display eCPMs—another signal of campaign performance—have steadily increased
Effective CPM (eCPM) is a performance metric used by publishers and advertisers to understand the revenue generated per 1,000 ad impressions

Mobile CPMs remain lower than desktop CPMs—a condition likely to persist for some time

An increase in mobile ad spending will not necessarily result in higher CPMs
Supply will continue to outweigh demand because spendingon mobile advertising lags time spentwith mobile devices

Mobile Advertising Scorecard

In aggregate, marketers and digital ad experts gave mobile advertising a “B-” gradefor effectiveness
Their effectiveness scores for TV and desktop advertising were just slightly better

Marketers graded 16 aspects of mobile advertising in terms of effectiveness. Location- based ads received the highest mark
Most effective
Least effective

Location-targeted mobile ads Effectiveness score: A-
Key Insights:
The combination of location and daypart targeting is proving to be particularly powerful
Location targeting enables brands to satisfy consumers’ real-time needs

Location-based ads are most powerful when the phone’s ‘use case’ is taken into consideration
“We see a lot of people that don’t actually think about a hotel or a car until they get to where they’re going. So in that sense location targeting is a massively good way for us to reduce friction and say, ‘You don’t have to search. We’ll find where you are, we’ll find a property that’s close to you.’”
—Blake Clark, director of mobile for Travelocity

Mobile in-stream video ads Effectiveness score: B+
Key Insights:
Effective but inventory is still scarce, which puts limitations on campaign scale
Short supply also has an inflationary effect on pricing, so at this point mobile in-stream video advertising is the domain of bigger brands
The length and style of mobile video ads are also evolvingtoward shorter and less polished ads

JetBlue used video assets and location/device targeting to engage consumers
For the airline’s “Air on the Side of Humanity” campaign, smartphone ads aimed to raise brand awareness and were delivered inside a geofencearound public transit centers during commuting hours
Tablet ads were designed for deeper engagement and included a rich media game and long-form video
Source: Mobile Marketer, April 4, 2014

Mobile sponsorship ads: Effectiveness score: B+
Key Insights:
The form of the sponsorship varies widely depending on the content environment and the advertiser’s objective
Clear objectives and key performance indicators are needed

Brand building was the objective of MINI USA’s mobile sponsorship campaign with UrbanDaddy
“The [sponsorship] experience was about brand building, and it proved very successful for us. We looked at interactions within the app, how many people signed up to be a participant in the ‘MINI Night Out’ program and how many provided [contact details] to get more information.”
—Lee Nadler, marketing communications manager for MINI USA

Hershey sponsored the mobile data needed to deliver the brand’s mobile video ad in-app
The Hershey’s Scharffen Berger brand ran mobile banner adsin the Pandora iPhone app with a 30-second video on the landing page
Copy on the ad explains the video is sponsored and does not consume datafrom the user’s phone plan
Source: Mobile Marketer, April 1, 2014

Facebook’s mobile ad formats Effectiveness score: B+
Key Insight:
The social network’s ads are helping marketers achieve multiple goals, from generating sales to driving app downloads

Facebook’s mobile ads are closest to closing the loop for marketers
“Facebook is certainly the platform that’s come the furthest in terms of helping us understand how our media is driving the business. We’re starting to be able to do some things with Facebook’s mobile ads to drive omnichannel sales, and we’re very excited about that.”
—Jennifer Kasper, group vice president, digital/new media and multicultural marketing at Macy’s

Result reporting process Effectiveness score: C+
Key Insights:
The manner in which campaign results are reported for mobile display ads varies greatly by publisher and ad partner
The disparate nature of reports makes it difficult to aggregate and interpretcampaign results

Reporting is still in its infancy—a consolidated view of all results is needed
“Reporting requires separate plug-ins and it’s a challenge for marketers to roll up and understand all of the results in a single view.”
—Heidi Browning-Pearson, senior vice president of strategic systems at Pandora

Measurement and analytics Effectiveness score: C
Key Insights:
Low scores for measurement and analytics indicate marketers don’t have a clear vision of mobile’s true impact, especially on foot traffic and sales in brick-and-mortar locations
Methods for understanding what consumers do immediately after engaging with a mobile ad need work

Need to measure more than ad engagement
“The analytics are there for engagement and understanding impressions. But it’s hard to track [the ad] to a transaction, and that’s where it falls down.”
—Laura Jakobsen, senior vice president, marketing and design at Pinkberry

Mobile creative capabilitiesEffectiveness score: C
Key Insights:
Creative teams have only scratched the surface when it comes to leveraging the native capabilities of smartphones and tablets
Creative assets developed for the desktop are often repurposed for mobile despite widespread agreement that a tailored ad experience would be more effective

Brands are beginning to push creative boundaries and leverage device capabilities
Nivea launched Bluetooth-enabled print ads in Brazil
Sources: Ad Age, June 17, 2014,
BEcause Blog May 22, 2014

What Will Improve Mobile Ad Effectiveness Further?

Answers to this question revolve around four key areas:
1.Improved creative: Interactive formats that make use of all device capabilities and are integrated with the content experience.
2.Data integration: The ability to tie mobile users back into other data sets that marketers already own needs improvement.
3.Standards: Guidelines for creative development, user tracking and results reporting across devices need to be more cohesive.
4.Measurement tools: Better analytics and measurement solutions are needed to gauge return on investment and lifetime value. Off-the-rack-type tools would be ideal.

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Cathy Boyle
Mobile Ad Effectiveness
Mobile Advertising Scorecard: Marketers Give Mobile Display a B-Minus for Effectiveness
Mobile Ad Targeting: After Years of ‘Spray and Pray,’ Signs of Sophistication Appear
Worldwide Ad Spending: Midyear 2014 Complete Forecast
US Ad Spending: Q2 2014 Forecast and Comparative Estimates

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