• by Cheryl Ng , June 5, 2015

Mobile use continues to grow unabated as a new generation eschews traditional consumption channels. This year, mobile search surpassed desktop for the first time, with no signs of slowing down. For advertisers, this growth whet an appetite to increase mobile ad spend.

For publishers, on the other hand, it has caused as much headache as it has opportunity. While mobile may be the key to creating new revenue streams, challenges around mobile fragmentation, user experience and measurement stand guard to unleashing mobile’s treasure.

Publishers understand that where audiences go, money follows. It’s easy to comprehend, then, why advertisers are flocking to mobile in droves. More consumers are using their mobile device, giving brands an additional opportunity to engage anywhere with a highly coveted audience. This is why brands such as Facebook have seen tremendous growth in the mobile space.  

But for traditional publishers, unlocking mobile dollars has been no easy task. Advertisers no longer just want mobile ad placements – they are seeking location data, interactivity and expanded targeted capabilities. For publishers, though, these demands require a lot of heavy lifting, making mobile adoption sluggish. Several factors compound the difficulty in making headway:

Lower conversion rates. Despite the sizable audience using mobile, mobile advertisements maintain a lower conversion rate than its desktop counterparts. With advanced tracking and more selective buying via real-time bidding platforms, advertisers are looking to buy as far down the purchase funnel as possible, and so desktop purchases happen at almost double the rate of mobile. While audience remains a key selling point, advertisers are really looking for conversion rates, which ultimately determines ROI of ad spend.

Longitude and latitude. Part of the power of mobile impressions is the ability to hyper-target consumers based on their exact location. That is because mobile traffic often collects longitude and latitude coordinates, offering advertisers exact targeting based on location. While this may seem like an advertiser’s dream come true, it comes with its own set of challenges.

First, accuracy remains a concern. Location trackers have suggested that only 34% of ad requests based on location are accurate within 100 meters. A one-third success rate is not enough to sustain ad spend, and no way to create longevity for this revenue stream. Second, with hyper-focus comes lower inventory levels. A retail store advertising products to users near their stores is wonderful; however, hitting that person at that exact time and place is difficult, as well as scarce. And that location data cannot be capitalized on by all advertisers. 

Buyers’ market. While there is an abundance of mobile supply, being a buyer’s market is more than simple supply and demand economics. For mobile, demand exists only for a small portion of its supply: the supply of audiences in the right place at the right time. When it comes to desktop, publishers know what advertisers want: what content, what audience segments, etc. In mobile, sellers have much less control over the audiences that buyers desire.

But there are some methods to create location enriched audiences. For one, publishers can create content that encourages users to enable location services. They can also create “quick-look” user interfaces that enable on-the-go usage. Additionally, publishers can incentivize “out and about” usage with features like check-ins and push notifications.

The rise in mobile has created a vast new marketplace for both advertisers and publishers. But where advertisers see endless opportunities, publishers are challenged with creating a product that meets the demands of the buyers. As mobile continues to rise, both sides will learn to adapt to the marketplace, but it certainly won’t be without struggle.