The growth of mobile presents a huge opportunity for Australian advertisers. Three quarters of us use a smart phone, one of the highest levels in the world. Yet the latest IAB Online Advertising Expenditure Report shows that only 17% of ad spend finds itself on mobile devices.
There are a couple of reasons for this gap. First, smartphone penetration has grown so quickly that the advertising industry is playing catch-up. Many are also struggling to come to terms with what form that advertising should take.
The first thought for many advertisers is banner advertising. It’s a familiar concept online so, they assume, it will work just as well on mobile devices. In the IAB’s 2014 Mobile Industry Snapshot 96% of buyers working on smartphone campaigns planned to use banner advertising, even though it’s a format that doesn’t sit happily with the medium. Let’s face it,
banners are often seen as intrusive and, given the scarcity of screen real-estate, they often look out of place and contrived. On smartphones there’s no right hand column for ads to appear in, and top, or bottom, of the page banners distract and annoy the user.
When space is at a premium content needs to be optimised and contextualised. App designers know this. The user experience is what distinguishes a good app from a bad one. Publishers are following their lead; Time Inc., Forbes, Wall Street Journal, New York Times, and USA Today now have sponsored content that matches the form and function of their editorial feeds.
This is the simple concept behind native advertising – display your message in the right context, within the content the user is seeking. InMobi’s global survey (of 348 global publishers, agencies and brands) shows that 97% of people in the industry know what native advertising is, but only 36% currently use it.
Many advertisers are simply unsure how to develop native campaigns. One third of the respondents to the InMobi survey said that they lacked the expertise for developing mobile native ads.
Curiously, almost a quarter of respondents cited lack of measurement as an issue, even though native ads are as accountable as any other online mechanisms. In fact, beyond traditional measures such as CTRs and conversions, companies like Bidtellect are adding engagement scores, similar to those who see through sponsored content on social media.
Of those currently using native on mobile, 60% said it improved audience engagement and others pointing to higher eCPMs. Many believe it has been an effective mechanism for increasing brand awareness.
Little wonder, then, that the demand for native is one the rise. In 2014, around 20% of digital mobile ad budgets were spent on native ads. Over the next couple of years one in five buyers say at least half of their budget will be spent this way.
Most publishers believe mobile apps will get the most out of native advertising, particularly those focused on entertainment, news, retail, health, electronics, automotive and telecoms. They’re right, but the opportunity isn’t limited to apps, or indeed, to those sectors.
Widespread adoption does require a mind shift, however. Mobiles present an enormous opportunity. Smartphones are deeply engaging devices and well placed messaging can have immense cut-through. But the audience is very discerning. Poor placement doesn’t just produce weak results, it can negatively impact a brand’s reputation. That’s why native campaigns are preferable to the more slingshot approach of banner ads, but they require careful planning and, more publishers need to embrace the concept and provide the inventory.
The InMobi survey showed that only 36% of the respondents currently use native ads, but that’s changing. At least 51% of the publishers, 62% of the advertisers, and 54% of the agencies said they plan to move into the space very soon. They’d better hurry. Recent IAB research shows that Aussies spend more than half their screen time on mobile devices. The audience is there, you just have to figure out the best way of reaching them.
Jon White
Regional director and GM
Australia and New Zealand