VentureBeat Exclusive: How Brands Are Shaping the Future of Mobile Advertising

August 17, 2016

Mickey Maher

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With mobile ad spend on track to exceed $100 billion in 2016, publishers and advertising professionals are seeing thousands of new campaigns every year. Though format and channel popularities continue to shift, the majority of mobile campaigns have been for games and apps, but that’s about to change. Consumer brands are poised to make a substantial push into the world of in-app mobile advertising, and that’s great news for the mobile industry at large.

Breaking the brand barrier

A 2015/2016 report by eMarketer explains how multiple factors have discouraged brand advertisers from moving into mobile since its inception. Format diversity, pricing variance, and lack of consensus surrounding performance metrics have all helped to slow adoption. Brands have historically preferred desktop and mobile web advertising, which come with their own problems.

These include issues of fraud and viewability in which ads are “falling outside the view of a person’s computer screen or rendering only after a person has scrolled past them.” Studies have shown as much as 39 percent of programmatic ad impressions are bot-generated, and never seen by human eyes. It’s driving media buyers to explore other options. Chief among them has been mobile, where static and video interstitial technology has evolved to make this kind of fraud significantly less common.

Surveys conducted this year as part of the same eMarketer study revealed that 47 percent of US media decision-makers ranked “Increased Brand Awareness” among the top three benefits of mobile video advertising. Second and third on the list were “Better Engagement/Interaction” at 34 percent and “Suited to Mobile Consumption Behaviors” at 31 percent.

This represents a recent shift in attitude that ad professionals have speculated about for years, and the incumbent mobile advertising players are gearing up to meet the oncoming demand. Mobile ad networks like AdColony, Unity and InMobi have been welcoming brands and their representative agencies, and with good reason. Mary Meeker’s 2016 Internet Trend Report shows a $22B mobile brand advertising opportunity in the United States alone, resulting from the gap in percentage of user time spent on mobile versus actual brand dollars spent in the medium.

Publisher push for brands

On the other side of the fence, interest from publishers is fostering change. Despite research to suggest that mobile CPI campaigns have no negative impact on retention, some publishers are eager to supplement revenue from existing performance campaigns with brand impressions in hopes of generating comparable, if not greater revenue and eCPMs.

To them, CPI ads represent an invitation for their users to download a new or competing app and abandon the one that showed it to them. Even though research shows the contrary, some publishers still prefer brand ads to ads for competing apps, especially if they can make comparable revenue. It’s a stigma that demand-side providers have tried for years to undercut, yet still manages to take root even among mobile publishing veterans. Justified or not, publishers eager to sustain ad revenue without cannibalizing DAU continue to push for brands to invest more of their ad budget in mobile.
 

Brands are coming to in-app

Anyone that generates revenue through in-app advertising stands to benefit from brand adoption. Greater campaign diversity means more opportunities for granular optimization in the major markets. That said, complexity brings with it the need to iterate tech and strategy in order to navigate market trends, cut through the vanity metrics, and stay two-steps ahead of the competition.

And while the biggest names in the industry are betting on the massive arrival of brand interest, it’s not here yet. We at Upsight spend every day optimizing ad traffic in enterprise-tier mobile portfolios and we’re predicting at least 12 to 18 months before the first big wave of brand advertising hits mobile at a scale that competes with performance demand.

It takes years for demand-side trends to permeate the market. Unlike emerging formats which lend themselves to success stories like Crossy Road and its use of rewarded video, campaign adoption is thoroughly tested before being rolled out incrementally. Regardless, brands are on their way, and they’re going to change the mobile ad business for everyone.



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