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Summary:

Much digital news consumption is moving to mobile devices. But the money isn’t yet following. UK publishers say slow-coach ad agencies still wedded to desktop web ads are at fault.

Publishers are seeing mobile audiences growing fast – but revenue is yet to catch up, and it’s the ad industry taking the blame.

Mobile makes up a fifth of reader traffic for 87 percent of publishers, but only 29 percent of them are seeing the same proportion of revenue come from mobile, according to respondents to a census issued by the UK’s Association of Online Publishers (AOP).

Asked to name the main inhibitors to mobile revenue generation, a majority blamed “agencies’ attitude toward mobile” (55 percent) and dependency on low-yield ad networks (52 percent).

Clearly, the two groups have much work to do if they are to realise the platform’s full potential. This can’t go on forever – many publishers are becoming worried about migrating their audience from web to mobile in lieu of the latter offering an equivalent business model.

AOP director Lee Baker says:

“We are going to see some fundamental changes to the mobile ad market over the coming year as ad agency attitudes catch up with publisher investment and mobile audience size.

“Ad revenues will experience massive growth, doubling within 12 months of agencies recognising the opportunity in the mobile market.”

For many readers, mobile news consumption means disaggregated consumption through apps like Flipboard and Pulse. Some publishers are concerned about effectively giving away their ad sales to those apps in this way. The New York Times, for example, has struck a partnership with Flipboard.

The fear isn’t stopping publishers from ploughing ahead with mobile content developments. Of AOP census respondents, 91 percent and 85 percent of them said tablets and mobiles, respectively, represent their greatest opportunities for revenue growth in the year ahead, with 62 percent saying they would make the majority of their sites optimised for mobile.

The census was completed by 90 percent of the AOP’s membership, comprising publishers of over 1,500 digital brands.

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  1. I think the more underlying issue is that ‘traditional’ ads do not work on mobile (or generalised to modern consumers and their mediums). Digital agencies have been incorrectly labeled, they’re web agencies and mobile (and other new forms of emerging platforms) are not web – they exist and are used in a different paradigm which requires a shift in thinking and execution.

    Production skills exists (and technology exist that address fragmentation etc) – I think stratergy and creativity skills lag behind and management need to up-skill to understand and respect the constraints and actual cost (time) to produce something – it’s requires a more software engineering approach than what has been required for the web (i.e. ‘banner ads’).

    1. @Josh, not only do display ads not work the traditional approach is for all intents and purposes DEAD on both mobile and traditional internet. When agencies and advertisers address this fact and start thinking outside the box to work toward ROI again, then perhaps something will be done to amend the current broken paradigm.

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  3. CPM should be the same or higher because of the reduction of surrounding ad and content clutter on a mobile device.

  4. What does “agencies attitude towards mobile” mean? We could unpack that statement in a variety of ways. They overvalue mobile? Undervalue mobile? They don’t understand mobile? They don’t pay enough attention to mobile? The technology they use is wrong?

    This is a vague and poorly worded survey question which results in a meaningless data point.

  5. Where are the html5 ad agencies? Creative and interactive design, engagement – all now perfect for the latest devices. The classic Vogue understands that adverts are a contextual part of the product and keeps high standards.

  6. Connor Tubridy Tuesday, October 2, 2012

    Agencies can’t be blamed for slow adoption of mobile ads. Clients are risk-averse and aren’t going to shift their entire digital budget to mobile overnight. It’s still viewed as risky by CMOs. They’ll test the waters with a small fraction of their budget and compare results to desktop. Unfortunately, small buy yields small results. Often clients aren’t testing mobile with enough buying power and writing it off prematurely as ‘not being right for their brand’ because they don’t see immediate results.

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