Tags:

ADVERTISING, OPINION, THE STARTUPS ECOSYSTEM

By Sophie-Charlotte Moatti (@scmoatti), Product management leader, Mobile, product, monetization, Facebook

16 January, 2014: The mobile internet advertising industry, dominated by Google, isn’t delivering compelling results so CMOs are turning to mobile native advertising, a nascent industry with lots of opportunities for innovation, from multi-screen campaigns to performance-based advertising. Advertisers should experiment based on some of the early best practices described below.

CMOs can no longer ignore mobile advertising. Especially to reach Millennials.

When I ran my first mobile marketing campaign 5 years ago, I was sold on what today would seem like a scam: CTRs (Click-Through Rates) were 3-5X higher than on the web, and inventory was plenty so ad networks were giving away up to 10 times more impressions to advertisers, just because. Mobile internet advertising was a smoking deal!

Today, mobile advertising is a big market. According to eMarketer, marketers spent $16bn in mobile internet advertising in 2013, an 80% year-over-year increase. This is no small amount! The majority (50%) goes to Google, with Facebook a far second (15%.) Analysts predict that this market will grow even faster in 2014, as mobile transitions from pilot status to center stage on the agenda of most CMOs.

What fueled this explosion over the last 5 years? Apple launched the iPhone precisely at the time that Millennials entered college, which started the smartphone revolution we’re in today. The numbers speak for themselves: according to a study conducted by InMobi, the majority (54%) of Millennials use a mobile phone exclusively to go online because it’s always there and easy to use, they say.

And Millennials are especially receptive to mobile advertising. According to InMobi, most (64%) of them are comfortable with mobile ads as much as or more than TV / online ads. Mobile ads impact their purchase decision as much as TV / online ads. One interesting fact is that most (64%) Millennials multitask while watching TV, which has spurred a new trend called “multi-screening” campaigns. Forrester recommends that CMOs set up marketing innovation labs in 2014 to experiment with it.

Mobile internet vs. native ads. Native wins.

But mobile internet ads such as banners aren’t delivering the conversion rates that marketers expect for their campaigns. Market leader Google realizes this and hence recently decided to invest $8m in a startup called YieldMo, which specializes in optimizing custom mobile internet ads on top of its sophisticated A/B testing platform to deliver up to 3X the CTR of traditional banners.

Meanwhile, advertisers are experimenting with a more effective type of mobile ads: mobile native ads, which allow for more immersive user experiences. IPG Media Labs conducted an eye tracking study which shows that consumers look at native ads 53% more frequently than banners. They are also more likely to share a native ad (32%) than a banner ad (19%).

Early best practices for mobile native ads. Engaging content & performance tracking.

What makes effective mobile native ads?

Next, a relevant call-to-action is important to drive conversion. Mobile native ads open up a whole new world of attractive offers based on a user’s location, which can dramatically increase conversion by shortening the path to purchase. Location can also be used when picking a target for your campaign.

Another important element to take in to consideration when targeting mobile native ad campaigns is the publisher environment, which means understanding ad formats and sizes. Some publishers yield better conversion for certain categories of advertisers. For example, social apps do best on sports / health sites and entertainment apps on communication sites.

Finally, it’s critical to set a clear goal to track the effectiveness of a mobile native campaign. Many advertisers are going one step beyond CTR and looking at CPD (Cost Per Download) as their measure of success. CPD varies widely depending on the type of content promoted and the lifetime value of the user, from games, sports and retail (lowest) all the way to travel and financial services, which can cost up to 40X more than gaming campaigns. With enhanced performance tracking, campaign optimization becomes easier allowing advertisers to strengthen the case for mobile advertising.

What it means to you. Experiment with native ads.

Mobile is moving from project to center stage in 2014. CMOs will be expected to make recommendations for mainstream campaigns that include a strong mobile element. To do so, they need to set up a structure that will allow them to experiment with native ads quickly and effectively. More than any other platform, mobile demands beautiful, easy to digest content and enables performance tracking, which is a great combo to deliver results. Time to go mobile!

About the author

Sophie-Charlotte Moatti (SC) is a driven general manager who builds and leads teams that transform technology companies into mobile-first organizations. The mobile services she created are used by billions of people. She has won industry awards such as Emmy nominations and has created significant shareholder value. Prior to joining Facebook, SC successfully sold the mobile company she founded and was general manager of a top 1% mobile commerce app at Nokia. She has a Stanford MBA and an MS in electrical engineering and frequently speaks on mobile, social networks, and startups (CTIA, Commerce World, Stanford, etc.) Find more @ www.linkedin.com/in/scmoatti/