Mobile Advertising Metrics: What Matters Most

iStock_000002056482SmallWhen it comes to the mobile advertising ecosystem, one of the areas that needs significant work is that of metrics and measurement. While legacy metrics such as CPC and CPM make sense to some extent, they don’t fully capture the breadth and depth of user engagement on mobile. As such, new cost-per-action (CPA) metrics and definitions need be developed that everyone in the industry agrees to and advertisers can rely on in order to understand consumer behavior and the return on advertising (ROA).

There has been a lot of discussion around the number of impressions in the industry, but impressions don’t equate to reach. And while such a number is a useful metric to track growth, it can also serve as a distraction. The real metrics to track are:

Reach

How many unique customers can you reach? Reach is still the most important criterion for advertisers to judge success of a campaign. With mobile we can measure unique users much more accurately than with any other medium. Mobile offers the opportunity for the advertiser to the reach the consumer at the right time and the right place using the right medium with the right message.

Targeting

Mobile thrives on targeting. Ad networks that can provide targeting beyond country, carrier and handsets to offer more granular location, demographic and contextual options will be the ones offering more value to both advertisers and publishers.

Engagement

We don’t want to just capture the “moment of first sight” but the “duration of sight” and how the user interacts within that duration with both the individual ad and the overall campaign. In order to differentiate and be effective, mobile has to measure and report on how users are engaging with the campaign, from first impression to the last so-called “moment of sight.” It should take into account the time spent during the visit as well as the actions and reactions.

Viral

One of mobile‚Äôs key features is its ability to offer users one-click sharing. If something is “good,” it will catch on fast. One has only to target power users, who represent just 1 percent of mobile users, to reach 20-50 percent of the subscriber base. Such capability should be built into every campaign and measured accurately to determine its true effectiveness.

Transactions

Mobile enables a closed loop functionality like no other medium. Transactions are essentially a measure of the “true” ROA. We need to measure how a campaign impacts a company’s bottom line. If the campaign doesn’t move the needle over time, it didn’t really work, but we won’t know whether or not it has without measuring.

Ad networks that are positioned to provide measurements and solution offerings on the above metrics will be able to rise above the noise and offer more compelling value propositions over the long term. So far, the industry has tried to adopt online measurement models without taking into account the specific strengths of mobile advertising distribution. To track the effectiveness of mobile as a media channel, we will have to move away from legacy models and invent new ones.

Chetan Sharma is the president of Chetan Sharma Consulting and a member of the GigaOM Pro Virtual Analyst Network. His recent GigaOM Pro report, “The Evolution of Mobile Ad Networks,” (sub required) examines trends and forecasts in mobile advertising and metrics in more detail.

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