- Mobile ads today
- Mobile programmatic
- Key takeaways
- About Aram Sinnreich
Mobile advertising has grown over the past few years into a thriving, multibillion-dollar industry. Yet a range of technological and economic factors are impeding its growth, preventing mobile publishers from adopting the most innovative ad sales models currently used for display inventory on the web and keeping vital brand advertisers from shifting their advertising budgets to this channel.
Despite its promise, online media companies and brand-name publishers are wary. They saw what happened to online display advertising, as new players with a reliance on direct marketing techniques, self-service, automated buying and selling, and cheap inventory drove CPMs ever closer to zero. Based on in-depth interviews with several mobile marketing executives at organizations including premium mobile publishers, major marketing service companies and the Internet Advertising Bureau (IAB), this report explores the landscape of mobile advertising and discusses what it will take for both buyers and sellers to take advantage of the opportunities it offers.
Key findings from our analysis include:
- Mobile marketing is undergoing a period of rapid growth and maturation and has adopted many innovations first pioneered in web display ads, including programmatic inventory sales. Mobile ad spending more than doubled to nearly $18 billion in 2013 and is on track to grow another 75 percent, to over $34 billion in 2014.
- The mobile advertising market is still faced with several significant strategic obstacles, including a fragmented market ecology, a lack of reliable and widely adopted format and data standards, a lack of buyer awareness and sophistication, and an uncertain future for targeting in the cookie-free mobile app environment.
- Mobile publishers anticipate growing advertising revenues in the years to come, as brand advertisers are wooed to the channel by its increasing reach and sophistication.
- One of the most promising models for mobile ad sales is via programmatic direct (PD), which can provide publishers with premiums of 5-10x compared to inventory sold via RTB exchanges and ad networks. Mobile PD offers a “best of both worlds” scenario, allowing buyers to recognize the efficiency and transparency of auction sales while leveraging publishers’ brand halos.
- Mobile PD adds a new, middle tier to the mobile ad sales “waterfall” model, between highly customized, high-premium “Tier 1” inventory sold directly and highly standardized, low value “Tier 2” inventory typically brokered via RTB exchanges and ad networks. Call it “Tier 1.5.”
Thumbnail image courtesy: iStock/Thinkstock
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