Features

The 5 Most Common Misconceptions about Mobile Advertising

Written on
Jun 25, 2014 
Author
Adam Foroughi  |

ADOTAS – It’s 2014. Surely brands are coming around to mobile, right?

Maybe not. Although Mary Meeker’s latest report did find that mobile advertising grew 47% in the past year, many still believe in the misconceptions surrounding mobile advertising despite this strong outlook.

Some aren’t sure how ads help drive mobile commerce, and they think building a brand is an organic process instead of one that requires an investment of time and money.

So we wanted to go ahead and tackle these misconceptions head on. At AppLovin, we work with more than 300 brands that are mobile trailblazers, such as OpenTable and Spotify. Based on all the data that we’ve compiled, we can debunk many of the myths behind mobile advertising:

Myth #1: A Brand’s Mobile Presence Will Happen Organically. Meeker has been telling us that mobile is the future for years, but brands are still slow to adopt. Brands need to dedicate time and money on mobile — growth isn’t going to happen without it. Brands that create a strong experience benefit from mobile’s explosive growth and are positioned to leverage marketing tools to drive mobile transactions.  We found that retailers who invest in a “mobile-centric” strategy are already seeing over 40% of their digital revenues coming from mobile. Forrester estimates 29% of companies’ digital revenues will be transacted on mobile by the end of 2014.

Myth #2: Mobile Ads Aren’t Effective — No One Clicks Them or Converts from Them. Most of us might think that the only clicks on ads are accidental, and many people certainly believe there is no chance a user actually converts from a mobile ad. In reality, though, mobile ads are effective and lead to high conversions when they are relevant to the user. Users are buying products when they see relevant ads. We see that users’ propensity to buy a product more than doubles for users who click relevant ads (vs. those that do not) and for users who just saw the ad (but never clicked) their propensity to buy increases by 30%.

Myth #3: Mobile Ads Don’t Get Consumers to Spend Much on Mobile. Sure, some people might actually be clicking on the ads. But are people buying products as a result? And if they are, do they spend much? Based on what we’ve seen, yes. In a recent retargeting campaign, the average dollar value of mobile app checkouts ranged from $64-$102 for sales attributed to the advertisements. Successful mobile commerce companies see over 40% of their revenue driven from mobile.

Myth #4: It Is More Important To Spend On Advertising For iOS Users Over Android Users Because They Are More Likely to Spend. Again, the numbers tell a different story from what we might expect. While iOS monetization from ads is still higher than Android, the gap is starting to close. The AppLovin network shows Android is starting to gain. For example, we see that top grossing game developers are starting to make similar average revenue per user on both Android and iOS. While top mCommerce companies are still seeing more revenue generated on iOS, revenue on Android is growing fast and quickly closing the gap.

Myth #5: Budgeting for Ads Is Like Throwing Darts in the Dark. One of the biggest misconceptions about mobile advertising is that it’s impossible to see how successful the ads are. But as mobile technology advances, we can attribute revenue generated for every action that takes place. Advertisers can target based on whatever statistic they want to measure (ROAS, revenue, purchases…) and that means they can finally track the impact mobile is making on their business.





Adam Foroughi is co-founder and CEO of AppLovin, the fastest growing mobile advertising technology that enables brands to acquire and re-engage customers on mobile. AppLovin’s mobile marketing platform  empowers brand advertisers to acquire and re-engage customers through its ability to automate the mobile buying process and attribute revenue back to every dollar spent on its platform. The company offers dynamic ads to over a billion consumers each month and works with 300+ world-class brands including OpenTable, Hotels.com, eBay, Spotify, GREE, Zynga, and Groupon.

Reader Comments.

I would add that it’s an absurd argument – and one I hear often – that precision targeting of ads will usually backfire. That’s total nonsense. The ability to improve targeting/tracking will make ads SO much more relevant and ultimately effective. Anyone that tells you consumers are creeped out by this doesn’t know the facts. Mobile/online users WANT more useful ads and respond well to ads that are well-targeted – http://www.airpush.com/how-consumers-are-driving-a-new-acceptance-of-mobile-advertising/

Posted by Eddie C. | 1:13 am on June 26, 2014.

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