Effective or not. Overhyped or not. Well executed, targeted, integrated…or not. The arguments over mobile ad effectiveness will no doubt be all the rage in 2013. But there is little doubt that money is flowing into the ecosystem along with some degree of optimism. According to the Q4 2012 report on activity across 30 billion ad impressions, in its app ad exchange of 12,000 apps on over 40 DSPs, MoPub reports that eCPMs for the quarter were up 50%. With a high of $1.12 for iOS and $.81 for Android in December, MoPub saw ads on Apple platforms rise 66% and on Android rise 54%. The good news for the industry and for publishers is that the spike appears to be holding, with a relatively small dropoff of eCPMs after the holiday. iOS peaked at $1.25 in the last two weeks of December, but drew back only to $1.07 in the first week of January. Click-through rates actually went up after the holiday.
The iPad continues to be the gift that keeps giving, with eCPMs reaching $1.40 in December, up 49% in the quarter. Android tablets also rose, but from a much lower starting point to $.99 (up 69%). iPads are in highest demand among all devices, attracting more bids per impression on average (5.3) than iPhone (5.0), Android (4.6) and Android tablets (4.2). the iPad is proving out the premium pricing with far and away the highest average click-through rates of any platform (2.2% in the first week of January) compared to 1.5% for iPhone, 1.1% for Android, and .9% for Android tablets.
Social networking was the category most in demand among advertisers, with 6.9 bids per auction on average, compared to 5.6 for sports and games.
The push for rich media this past year has had mixed results, according to this sample at least. While MRAID units (the IAB-defined standard) showed a considerable spike in eCPMs in December for a 1.6x premium over non-MRAID ads ($1.16 vs. $.83) the click-throughs on the ads were only 1.3% or 1.2x the 1.1% of nonMRAID ads. One might argue that the richer media tended toward brand messaging that did not include calls to action and so weren’t prompting the clicks in the first place. But MoPub’s finding suggest that we need to look more closely at the formats and how consumers are responding to them.
While the trajectory is favorable in this report, the role of RTB and data driven exchanges in the mobile space remains unclear. Dollar CPMs may seem rosy compared to earlier metrics, but it is difficult to see how this pricing supports a robust publishing ecosystem, especially for major media providers.
But as Magna’s Brian Monahan points out in his recent forecast of programmatic trading on mobile systems (an annual growth rate of 25% versus 30.6% for all of mobile), there are considerable hurdles to bigger investment. Targeting on mobile remains problematic for a number of factors. Tracking cannot take place easily between mobile browser and app, even when cookies are present, and most often they are not. And in the multi-screen habits of contemporary users tracking those users across PC and device is going to be critical. But Monahan raised one point that really did stand out for me -- brand safety. He writes in the report: “In exchange buying, a critical safeguard for brand appropriate environments is provided by ad safety vendors. In the Web they rely on web crawlers and macros delivered with their tags by the ad server to extract information on the content and the ad placement. These techniques are not yet sufficiently robust to extract the required brand safety information from mobile apps.”
Media buyer reticence continues. One trend this report does underscore is advertiser embrace of the tablet, however. Driven both by its creative palette and its propensity to covert, these larger screens are going to be the ad agency darlings this year. Deloitte predicts that this will be the last year the industry combines tablet ad spend and smartphone ad spend into a single and increasingly confusing “mobile” category. I agree. They are two very different platforms. But even in ad serving and creative, the confusion is evident to the user. I still get smartphone-scaled banners on my iPad as well as mobile ads that have been ‘optimized’ for the larger screen simply by blowing up low-res creative to fuzzy and ugly proportions. Landing pages can’t decide whether to treat me as a phone or a tablet -- so that in many cases, especially with network and exchange inventory, the seams are evident.
The advertising experience across both smartphone and tablets continues to feel like a patchwork and barely intelligent system that struggles to fit your device. How is it supposed to know your purchase intent?