How many times have direct response ad buyers heard the phrase, “Mobile is the next big thing”?
It seems like ever since the launch of the iPhone, ad buyers have been searching for ways to efficiently advertise to mobile phone users. In the past five years, online media buyers have been trying to solve the puzzle with varying degrees of results.
What’s driving the interest in mobile advertising? The mobile advertising interest is being driven by two primary factors – a growing audience and lower cost ads. It’s no secret that mobile phone usage is on the rise, and mobile advertising is – for the time being – super cost-effective. Compared to television and online advertising, mobile ads are a steal. The relative cost of reaching 1,000 people is just $2.85, while the same reach would be $6.45 for online and $33 for television advertising.
According to research firm eMarketer Inc, just 2% of all U.S. marketing spending will go to mobile advertising – but that still accounts for $2.6 billion in spending. Where is the money going? Smart mobile ad buyers have learned that the challenges of mobile can be overcome by targeting mobile users’ behaviors and preferences to encourage engagement and avoid annoying them.
Here’s what seems to be working best:
1. Being Useful.
Mobile phone users seem to be more responsive to ads that have a fun or useful element involved. Rather than using straight advertising messages, many mobile ad creators are taking an advocacy or play approach.
For example, Zillow’s mobile advertising program lets realtors place their picture and contact information next to Zillow’s listings in their area. If mobile users have questions about a home or property, they can just tap a picture and get in touch with the realtor. Other unique mobile advertising models use this same approach by encouraging users to tap a picture or complete an action to win “points” or participate in a game. Users don’t feel they are being advertised to, but companies still get the exposure.
2. Search-based Advertising
Mobile phone owners are using their phones to search online just as much as computer users, and as a result this category accounts for the largest portion of mobile ad spend. eMarketer’s research shows that 47% of digital ad spending is going to the web search model.
Search-based mobile ads are effective because they meet searchers’ needs in the moment. A user just clicks on an ad to be taken directly to a website, or in the case Comcast, directly to a live customer service representative. Comcast’s approach to search ads has been very effective for the company. In the last year, they reported that mobile users accounted for 10% of their sales.
3. “Ad Takeovers”
Each new generation of Smartphones seems to have larger screens, and mobile advertisers are taking advantage of this fact with display ads. When a mobile user lands on a webpage, the screen is briefly “taken over” by a mobile ad that nearly fills the entire screen. Expedia pays $1 to $1.50 per clicked-on “takeover” ad, and many advertisers are seeing up to 18% clickthrough rates on ads, compared to under 1% with traditional online advertising.
Much like pop-up ads that used to frequent web browsers, these ads interrupt the user experience, but they seem to be working well for the time being. As long as they are used sparingly – such as for new ad campaigns – people will continue to respond.
What isn’t working? As for the losers in mobile ad creation, traditional banner ads seem to drive users away. They are considered to be annoying and “old school” to many mobile users.
Focusing on useful ads, search-based ads and takeover ads seems to be, at least for now, a much more effective strategy for mobile ad creators and mobile ad buyers.