emarketer mobilenomics roundup

June 2015

Whether or not the year of mobile has come and gone, the world of marketing is getting more mobile all the time. By 2019, nearly three-quarters of US digital ad spending will be mobile, with programmatic ads, native ads, video and more migrating to smaller screens. eMarketer is watching the trends, and has curated this Roundup of articles, data and key insights about mobile advertising to help digital marketers understand and plan for effective efforts on this channel.

MOBILENOMICS ROUNDUP

prepared exclusively for

June 7-9, 2015

Mobilenomics Roundup Copyright 2015 eMarketer, Inc. All rights reserved. 2

MOBILENOMICS ROUNDUP

Overview

Advertisers around the world will spend nearly $69 billion on mobile internet ads this year, eMarketer estimates. They have good reason: Globally, 2.3 billion people will use the internet on their mobile phones this year. Thats helping to spur a 61.1% increase in worldwide mobile internet ad spending this year, and double-digit gains are nowhere near over. By 2019, the mobile ad market will reach $195.55 billion, or 26.8% of all paid media spending.

In the US specifically, more than 60% of the population will be mobile phone internet users this year, and penetration will continue rising. That audience will support a mobile advertising market reaching $28.72 billion in 2015, eMarketer estimates. Thats just shy of half the US digital ad market, and includes mobile internet ads as well as messaging-based advertisements.

Advertisers across verticals are migrating dollars to mobile channels. The entertainment industry has taken this furthest: 53.5% of industry ad spending is mobile this year. The retail and media industries are not far behind. Even the slowest vertical to move to mobile, healthcare and pharma, is now spending 40.0% of digital ad dollars on mobile buys.

As more money flows into mobile advertising, the balance between search and display spending is shifting. On desktop, the amounts spent between search and display are nearly equal, but on mobile devices, spending skews more heavily toward display.

With all eyes on mobile, marketers arent forgetting that people are more important than devices. Devices take center stage at the budgetary and tactical level, but strategically, marketers are focusing less on devices and more on people, specifically connecting with consumers wherever and whenever they access the web.

The biggest change were seeing is the move towards people-centric marketing, said Chad Gallagher, global director of mobile for AOL. Both brand and performance

advertisers are saying, We dont necessarily care about the device, we care about driving results against people. Thats a fundamental change.

Marketers are thinking more holistically about the customer experience they deliver across multiple screens instead of focusing on each device and channel as a silo. The vast majority (86%) of marketers worldwide polled by Salesforce in November 2014 said delivering a cohesive customer journey across devices was very important or critical to the success of their business.

Mobile Internet Ad Spending Worldwide, 2013-2019

Mobile internet ad spending(billions)

% change

% of digital adspending

% of total media ad spending

2013

$19.20

117.9%

16.0%

3.7%

2014

$42.63

122.1%

29.4%

7.8%

2015

$68.69

61.1%

40.2%

11.9%

2016

$101.37

47.6%

51.1%

16.5%

2017

$133.74

31.9%

59.4%

20.5%

2018

$166.63

24.6%

65.9%

24.1%

2019

$195.55

17.4%

70.1%

26.8%

Note: includes display (banners, video and rich media) and search; excludesSMS, MMS and P2P messaging-based advertising; ad spending on tablets isincludedSource: eMarketer, March 2015186887 www.eMarketer.com

billions and % of totalUS Digital Ad Spending, by Industry and Device, 2015

Retail

Automotive

Financial services

Telecom

CPG & consumer products

Travel

Computing products & consumer electronics

Media

Entertainment

Healthcare & pharma

Other

Total

Desktop/laptop

$6.26

$3.87

$3.70

$3.21

$2.63

$2.47

$2.35

$1.66

$1.30

$0.98

$1.44

$29.89

% oftotal

48.5%

53.0%

51.5%

49.5%

53.0%

51.0%

53.0%

49.0%

46.5%

60.0%

54.6%

51.0%

Mobile*

$6.65

$3.43

$3.49

$3.27

$2.33

$2.38

$2.09

$1.73

$1.50

$0.66

$1.20

$28.72

% oftotal

51.5%

47.0%

48.5%

50.5%

47.0%

49.0%

47.0%

51.0%

53.5%

40.0%

45.4%

49.0%

Total

$12.91

$7.30

$7.19

$6.49

$4.97

$4.85

$4.44

$3.39

$2.80

$1.64

$2.64

$58.61

Note: digital ad spending includes advertising that appears on desktop andlaptop computers as well as mobile phones and tablets, and includes allthe various formats of advertising on those platforms; numbers may notadd up to total due to rounding; *includes classified, display (banners andother, rich media and video), email, lead generation, messaging-based andsearch advertising; ad spending on tablets is includedSource: eMarketer, May 2015188660 www.eMarketer.com


Mobile Ad Spend to Top $100 Billion Worldwide in 2016, 51% of Digital Market

US and China will account for nearly 62% of global mobile ad spending next year

The global mobile advertising market will hit two significant milestones in 2016, according to new figures from eMarketer, surpassing $100 billion in spending and accounting for more than 50% of all digital ad expenditure for the first time.

The $101.37 billion to be spent on ads served to mobile phones and tablets worldwide next year represents a nearly 430% increase from 2013. Between 2016 and 2019, the last year in our forecast period, mobile ad spending will nearly double, hitting $195.55 billion to account for 70.1% of digital ad spend as well as over one-quarter of total media ad spending globally.

Not surprisingly, growth in mobile ad spending is being driven by consumer adoption of mobile devices. Next year, eMarketer estimates, there will be more than 2 billion smartphone users worldwide, over one-quarter of whom will live in China alone. Especially there and in other emerging and developing markets, many consumers are accessing the internet mobile-first and mobile-only, so leading advertisers allocate their digital expenditure to mobile accordingly.

The number of tablet users worldwide, while growing more slowly than the smartphone audience, is still expected to eclipse 1 billion in 2015. The proliferation of these mobile devices across the world is driving the shift in advertising from the desktop to reach these untethered, always-on consumers.

In the short term, the leading global markets, particularly the US and China, will drive mobile ad spending growth. In 2016, US advertisers will spend $40.24 billion to reach consumers on tablets and mobile phones, more than doubling the total from 2014, while those in China will invest $22.14 billionnearly triple the amount they spent in 2014. Both of these countries will see mobile become a majority of digital ad spending next year.

Mobile Internet Ad Spending Worldwide, 2013-2019

Mobile internet ad spending(billions)

% change

% of digital adspending

% of total media ad spending

2013

$19.20

117.9%

16.0%

3.7%

2014

$42.63

122.1%

29.4%

7.8%

2015

$68.69

61.1%

40.2%

11.9%

2016

$101.37

47.6%

51.1%

16.5%

2017

$133.74

31.9%

59.4%

20.5%

2018

$166.63

24.6%

65.9%

24.1%

2019

$195.55

17.4%

70.1%

26.8%

Note: includes display (banners, video and rich media) and search; excludesSMS, MMS and P2P messaging-based advertising; ad spending on tablets isincludedSource: eMarketer, March 2015186887 www.eMarketer.com

millions

Mobile Internet Ad Spending Worldwide, by Country,2013-2018

US $57,543

China* $40,604

UK** $11,142

Japan

Germany

South Korea

Canada

Australia

France

Netherlands

Italy

Brazil

Norway

Sweden

Russia

Denmark

Mexico

Spain

India

Finland

Indonesia

Argentina

Worldwide***

2013

$10,422

$920

$1,949

$1,835

$451

$455

$392

$341

$248

$162

$205

$66

$106

$140

$65

$108

$104

$53

$26

$41

$12

$8

$19,197

2014

$18,911

$7,537

$3,703

$2,752

$1,309

$1,000

$854

$852

$446

$454

$369

$249

$317

$293

$196

$269

$214

$101

$79

$102

$43

$24

$42,631

2015

$28,477

$13,977

$5,369

$3,853

$2,095

$1,600

$1,416

$1,364

$714

$680

$553

$549

$475

$440

$431

$391

$388

$176

$173

$153

$129

$71

$68,695

2016

$40,241

$22,140

$7,248

$5,009

$3,065

$2,080

$2,200

$2,114

$1,035

$953

$775

$1,015

$641

$594

$776

$508

$605

$300

$347

$199

$323

$170

$101,366

2017

$49,560

$31,306

$9,133

$6,311

$4,198

$2,496

$2,862

$2,959

$1,450

$1,238

$1,046

$1,726

$821

$772

$1,087

$635

$910

$494

$589

$249

$743

$340

$133,743

2018

$7,573

$5,248

$2,946

$3,666

$3,847

$1,971

$1,548

$1,360

$2,675

$1,002

$927

$1,413

$762

$1,306

$781

$943

$298

$1,487

$612

$166,628

Note: includes display (banners, video and rich media) and search; excludesSMS, MMS and P2P messaging-based advertising; includes ad spending ontablets; *excludes Hong Kong; **includes SMS, MMS and P2Pmessaging-based advertising; ***includes countries not listedSource: eMarketer, March 2015186756 www.eMarketer.com


Rounding out the top five countries, the UK, Japan and Germany also will see significant increases in mobile ad spending next year, but in all three markets, a majority of digital ad spending will be on mobile devices in 2017 for the first time.

While the top five countries will maintain their positions throughout our forecast, there are other markets on the move. Next year, Canada and Australia will surpass South Korea to become the sixth- and seventh-largest mobile ad markets globally, respectively.

By 2018, several of the top growth markets will have made significant gains. That year, Brazil will jump three spots from 2015 to become the ninth-largest mobile ad market globally, and Indonesia will make the largest gain, rising from No. 21 this year to No. 12. Notably, however, despite Indias massive mobile audience, the market will continue to lag in mobile ad spending, failing to eclipse $1 billion by 2018.

Mobile Will Account for 72% of US Digital Ad Spend by 2019

Consumer usage and better ad formats drive dollars to mobile apps

Mobile ad spending continues to increase at the expense of desktop, taking more and more share of marketers digital ad dollars, according to new figures from eMarketer. In 2015, mobile ad spending in the US will increase 50.0%, reaching $28.72 billion and accounting for 49.0% of all digital ad spending. By 2019, mobile ad spending will rise to $65.87 billion, or 72.2% of total digital ad spend.

Next year will be the tipping point where mobile ad spending surpasses desktop. And while desktop advertising will remain a significant portion of marketers budgetsapproximately $25 billion in each year throughout eMarketers forecast periodmobile will continue growing in the double digits to gain more and more market share while desktop spending remains flat.

The shift to mobile ad spending is being driven mainly by consumer demand. In 2014, US adults spent an average of 2 hours, 51 minutes with mobile devices each day, up from 2 hours, 19 minutes in 2013. Meanwhile, desktop time fell to 2 hours, 12 minutes daily last year, after being equal with mobile time in 2013.

At the format level, mobile display dollars will continue to increase, outpacing mobile search. In 2015, US mobile display ad spending will reach $14.67 billion, compared

with $12.85 billion for mobile search. Through 2019, both display and search will increase at a similar rate, with display widening the gap slightly by virtue of growing from a higher base. By the end of our forecast, mobile display ad spend will total $33.90 billion, while mobile search will be $28.41 billion.

Its important to call out the other category as well, which includes classifieds, email and lead generation, among additional formats. US mobile ad spending on those formats will increase from $962 million this year to $3.32 billion in 2019. Meanwhile, mobile messaging ad dollars will rise in 2015 and 2016 before going on a slow decline through the remainder of eMarketers forecast period.

US Mobile Ad Spending, 2013-2019

Mobile adspending (billions)

% change

% of digital ad spending

% of total media adspending

120.0%

24.7%

2013

$10.67

6.3%

2014

$19.15

79.5%

37.7%

10.8%

2015

$28.72

50.0%

49.0%

15.3%

2016

$40.50

41.0%

60.4%

20.4%

2017

$49.81

23.0%

66.6%

23.9%

2018

$57.78

16.0%

69.7%

26.3%

2019

$65.87

14.0%

72.2%

28.6%

Note: includes classified, display (banners and other, rich media and video),email, lead generation, messaging-based and search advertising; adspending on tablets is includedSource: eMarketer, March 2015186582 www.eMarketer.com


Our new forecast breaks out mobile app and mobile web spending for the first time. This year, app spending will outpace mobile web browser ad dollars nearly 3-to-1. Advertisers will spend $20.79 billion to reach consumers via mobile apps in 2015, compared with $7.93 billion on mobile browsers.

Advertisers are finding compelling opportunities through video, rich media and native in mobile apps, as well as a better ability to target captive audiences. Next year, when mobile spending will surpass advertising on the desktop for the first time, app ad dollars will continue to gain steam, increasing 42.6% to nearly $30 billion, or 73.2% of all US mobile ad spending.

Mobile web ad spending will also grow at a healthy clip, rising 36.8% in 2016 to $10.84 billion, eMarketer estimates. Spending on the mobile web is being driven by programmatic, cookie-based targeting and bundling across devices.

eMarketers latest mobile ad spending forecast also includes mobile app install ads for the first time. We estimate that US app install ad spending totaled $1.67 billion in 2014, or 8.7% of all mobile ad spend, and expect this to reach $3.00 billion this year. That figure is an 80.0% year-over-year increase, yet still only accounts for 10.4% of all mobile ad dollars.

Spending on app install ads via mobile search was negligible last year, so the low share of total mobile ad spending doesnt paint the entire picture. App install ads accounted for 17.3% of US mobile display ad spending in 2014, and this is expected to grow to nearly 20% this year. The leading search providers are making strides to attract app developers ad dollars, but we expect app install ads to represent an insignificant portion of mobile search spending in 2015.

billionsUS Digital Ad Spending, by Device, 2013-2019

2013

$32.4

4

$10.6

7

2014

$31.5

8

$19.1

5

2015

$29.8

9

$28.7

2

2016

$26.5

9

$40.5

0

2017

$24.9

6

$49.8

1

2018

$25.1

7

$57.7

8

2019

$25.3

5

$65.8

7

Desktop* Mobile**

Note: *includes spending primarily on desktop-based ads; **includesclassifieds, display (banners and other, rich media and video), email, leadgeneration, messaging-based advertising and search; ad spending ontablets is includedSource: eMarketer, March 2015186555 www.eMarketer.com

US Mobile Ad Spending, In-App vs. Mobile Web,2014-2016

In-app (billions)

% change

% of total

Mobile web (billions)

% change

% of total

Total (billions)

2014

$13.67

88.2%

71.4%

$5.47

61.0%

28.6%

$19.15

2015

$20.79

52.1%

72.4%

$7.93

44.8%

27.6%

$28.72

2016

$29.66

42.6%

73.2%

$10.84

36.8%

26.8%

$40.50

Note: includes advertising that appears on mobile phones and tablets, andincludes all the various formats of advertising on those platforms; numbersmay not add to total due to roundingSource: eMarketer, March 2015186912 www.eMarketer.com

US Mobile App Install Ad Spending, 2013-2015

Mobile app install ad spending (billions)

% change

% of total mobile ad spending

2013

$0.77

-

7.3%

2014

$1.67

115.5%

8.7%

2015

$3.00

80.0%

10.4%

Note: includes advertising that appears on mobile phones and tablets, andincludes all the various formats of advertising on those platforms; excludesapp re-engagement adsSource: eMarketer, March 2015186911 www.eMarketer.com

billionsUS Mobile Ad Spending, by Format, 2013-2019

Display

Banners, rich media,sponsorshipsand other*

Video

Search

SMS/MMS/P2P messaging

Other(classifieds, email, lead gen)

Total

2013

$5.31

$4.59

$0.72

$4.92

$0.25

$0.20

$10.67

2014

$9.65

$8.11

$1.54

$8.72

$0.24

$0.55

$19.15

2015

$14.67

$12.05

$2.62

$12.85

$0.24

$0.96

$28.72

2016

$20.80

$16.87

$3.94

$17.87

$0.26

$1.57

$40.50

2017

$25.69

$20.60

$5.09

$21.73

$0.25

$2.14

$49.81

2018

$29.74

$23.78

$5.96

$25.04

$0.24

$2.76

$57.78

2019

$33.90

$27.04

$6.86

$28.41

$0.24

$3.32

$65.87

Note: ad spending on tablets is included; numbers may not add up to totaldue to rounding; *includes ads such as Facebook's News Feed Ads andTwitter's Promoted TweetsSource: eMarketer, March 2015186584 www.eMarketer.com


Expect More Programmatic Ads to Pop Up on Mobile

Mobile ranks as the No. 1 area of opportunity for programmatic

Following triple-digit gains in 2013 and 2014, programmatic ad spending will continue on a solid growth trajectory in 2015, rising nearly 50% to $14.88 billion, or 55.0% of total digital display ad spending, eMarketer estimates.

According to February 2015 research by RBC Capital Markets and Advertising Age, though, programmatic still makes up a small share of marketers total budgets. Fully 45% of US marketers put 20% or less of their marketing spend toward such placements, while just 8% invested over 20%. This will change in 2015, however, as nearly two-thirds of respondents intended to significantly or modestly increase their programmatic ad budgets in the coming year.

Mobile will see its fair share of those spending increases; it ranked as the No. 1 area of opportunity for programmatic, cited by 33% of marketers. Video landed in second, called out by one-fifth of respondents, while no other segment saw even half the response rate of mobile.

Of course, its not as if people arent already using mobile for programmatic. February 2015 research by Digiday found that plenty of US ad buyers and sellers were involved in mobile programmatic advertising. Among those polled, 69.1% said they conducted mobile advertising programmatically. This was the second-highest response, trailing only display (85.6%) and slightly ahead of video (67.1%).

eMarketer estimates that, following massive growth of 234.3% in 2014, US mobile programmatic display ad spending will nearly double this year, rising 88.4% to $8.36 billion, or 57.0% of total mobile display ad spending and 56.2% of total programmatic digital display ad spending. Next year, 68.0% of mobile display ad dollars will go toward programmatic as mobile accounts for nearly 70% of programmatic digital display ad spend.

% of respondents

Change* in Programmatic Advertising BudgetAccording to US Marketers, Feb 2015

Significantly increase22%

Modestly increase40%

Stay the same36%

Modestly decrease

2%

Note: n=905; *over the next yearSource: RBC Capital Markets and Advertising Age, "Social Media Survey,"March 15, 2015187018 www.eMarketer.com

% of respondents

Channel/Format Where US Marketers See the MostOpportunity for Programmatic Advertising, Feb 2015

Mobile33%

Video20%

Display16%

Social media14%

Native10%

TV8%

Note: numbers may not add up to 100% due to roundingSource: RBC Capital Markets and Advertising Age, "Social Media Survey,"March 15, 2015187020 www.eMarketer.com


Programmatic Sellers vs. Buyers: Whos More Hooked On Mobile?

Mobile grabs nearly 40% of sellers programmatic inventory, 30% of buyers spending

Marketers are excited about mobile programmatic, but based on recent research, sellers are further ahead when it comes to adoption. No matter which sides more advanced, one things for sure: Inventory and spending are exploding.

According to January 2015 research by Advertiser Perceptions, US media sellers allocated nearly 40% of their programmatic ad inventory to mobile. This was higher than the other two channels studied by 6 percentage points or more.

However, buyers exhibited different behavior. Among this group, display still ruled, grabbing 41% of programmatic budgets, vs. 28% of inventory. Mobile took three in 10 programmatic dollarsjust 1 point above video.

Research released in March 2015 by PulsePoint showed explosive growth in mobile inventory and spending worldwide on one part of programmatic: real-time bidding (RTB) ads.

Gains were strongest in Asia, where quarter-over-quarter growth was close to 192% in Q4 2014 alone, compared with 82.6% on desktop. Meanwhile, mobile RTB inventory rose 177.4% in Europe and 150.4% in North America in the final quarter of last year, vs. respective desktop gains of 85.0% and 56.6%. A look back at previous quarters suggested that growth isnt slowing any time soon, as quarterly RTB mobile inventory gains had accelerated throughout the year.

RTB mobile ad spending showed even more impressive growth across the board. In both Asia and Europe, expenditures on mobile RTB placements soared about 330% in Q4 2014, and in North America this figure came in right under 300%. Just like with inventory, all mobile spending growth rates were above those on desktop by the end of last year, and increases had made huge jumps quarter over quarter.

Buyers Sellers

% of respondents

Allocation of Programmatic Ad Budget/InventoryAccording to US Media Buyers vs. Sellers, by Channel,Jan 2015

Display41%

Display28%

Video29%

Video33%

Mobile30%

Mobile39%

Source: Advertiser Perceptions, "Programmatic Advertising Report, Wave3," March 2015187914 www.eMarketer.com

% change vs. prior quarter among impressions served byPulsePoint

Real-Time Bidding (RTB) Desktop and MobileInventory Growth Worldwide, by Region, Q2-Q4 2014

Asia Europe North America

Mobile

Q2 63.8% 38.1% 15.3%

Q3 117.7% 76.2% 76.4%

Q4 191.6% 177.4% 150.4%

Desktop

Q2 36.5% 41.2% -17.0%

Q3 98.9% 77.6% 25.2%

Q4 82.6% 85.0% 56.6%

Note: based on activity on the PulsePoint platform, broader industrymetrics may vary; includes display inventory; excludes video and mobilein-app formatsSource: PulsePoint, "Programmatic Intelligence Report 2014," March 30,2015188200 www.eMarketer.com


eMarketer expects this year to be a tipping point for the US programmatic market, as spending on mobile programmatic display ads will surpass that on desktop to grab a 56.2% share of total programmatic digital display ad spending. That share will leap again next year to nearly 70%.

How Much Longer Until Mobile Native Sees More Action?

Mobile native ads boost engagement, see higher CTRs

Mobile native ads now rank as one of the top developments in mobile advertising, and budgets are expected to increase significantly in the coming years. Those who have embraced mobile native ads have seen a multitude of benefits, particularly when it comes to engagement.

When January 2015 polling by Ovum for the Interactive Advertising Bureau (IAB) Mobile Marketing Center of Excellence asked US mobile marketers about their attitudes toward key developments in mobile advertising, eight in 10 said native ads were important to some extent, with 30% saying they were very important. This put mobile native as the second most important developmentpassing HTML5, No. 2 in 2013and behind responsive design by just 1 point.

Mobile native advertising usage was relatively low among marketers polled worldwide in 2015 by InMobi. Less than two in five respondents had run mobile native campaigns, and three-quarters said they spent 20% or less of their 2014 digital ad budgets on such efforts. More activity should take place soon; 57% planned to leverage native ads on mobile, and over half said theyd increase their mobile native ad budget by 25% or more in the next two years.

Among users and potential users, mobile native ads were especially popular for interacting with consumers, with six in 10 saying such placements engaged the audience better than other formats. Those who had used mobile native advertising or knew how to but had yet to do so also said the ads had a better look and feel (41%), increased brand awareness (34%), gave brands a more authentic voice (34%) and generated quality leads (33%).

% change vs. prior quarter on the PulsePoint platform

Real-Time Bidding (RTB) Desktop and Mobile AdSpending Growth Worldwide, by Region, Q2-Q4 2014

Asia Europe North America

Mobile

Q2 129% 99% 94%

Q3 238% 179% 180%

Q4 329% 331% 296%

Desktop

Q2 114% 113% 76%

Q3 315% 129% 150%

Q4 285% 214% 243%

Note: based on activity on the PulsePoint platform, broader industrymetrics may vary; includes display inventory; excludes video and mobilein-appSource: PulsePoint, "Programmatic Intelligence Report 2014," March 30,2015188201 www.eMarketer.com

% of respondents

Importance of Select Developments in MobileAdvertising According to US Mobile Marketers, Jan 2015

Responsive design

Mobile native advertising

HTML5

Programmatic buying

Mobile Rising Stars

MRAID

Real-time bidding

Veryimportant

31%

30%

29%

26%

26%

22%

21%

Somewhatimportant

50%

50%

46%

50%

50%

52%

41%

Notimportant

11%

13%

17%

17%

15%

15%

27%

Don'tknow

8%

9%

9%

8%

10%

12%

12%

Note: numbers may not add up to 100% due to roundingSource: Interactive Advertising Bureau (IAB) Mobile Marketing Center of Excellence, "Marketer Perceptions of Mobile Advertising - Third Edition" conducted by Ovum, March 30, 2015188235 www.eMarketer.com


Research released in October 2014 by Polar showed higher clickthrough rates (CTRs) for native ads run on mobile compared with desktop in the US and UK. Average CTR for native placements on tablets was 0.28%, and smartphones were right behind at 0.27%. Meanwhile, CTR for desktop native ads was just 0.15%. Consumers who accessed the sponsored content via smartphone spent the most time with it, at an average 3 minutes and 54 seconds. Time spent with tablet and desktop native ads was relatively even, at about 2 minutes each.

Mobile Advertising Is Farther Along than You Think

Steve Ahlberg

Vice President, Revenue Solutions and Product Management

Gannett

Mobile advertising can be an effective channel when done well, but similar to other channels, there are a few misconceptions. Steve Ahlberg, vice president of revenue and product management at US media conglomerate Gannett, spoke with eMarketers Rimma Kats about the top misconceptions of mobile advertising and where marketers and agencies are at in overcoming them.

eMarketer: What are the top misconceptions that marketers have with mobile advertising?

Steve Ahlberg: The biggest misconception is that you cant do anything interesting in the space, and thats been

a product of the small standardized units. Marketers are now going with larger size canvases that have full site interactions happen within them.

Additionally, agencies are starting to understand the possibilities within the mobile advertising space, but theyre not quite there yet.

eMarketer: Specifically looking at mobile search vs. mobile display, do these misconceptions vary?

Ahlberg: The biggest thing has been accountability. Has someone clicked on my ad because they wanted to vs. they just fat-fingered something and ended up clicking on it accidentally?

Agencies are starting to understand the possibilities within the mobile advertising space, but theyre not quite there yet.

There have also been a tremendous amount of nefarious players in the mobile marketing space. Premium publishers

% of respondents

Percent of Digital Ad Budget Allocated to MobileNative Advertising and Expected Change in SpendingAmong Brand vs. Agency Marketers Worldwide, 2015

Percent of 2014 digital ad budget spent on mobile

native

Expected changein mobile native

budget over next 2 years

0%

1%-20%

21%-40%

41%-60%

61%-80%

81%-100%

Don't know

Brand

33%

33%

13%

3%

6%

3%

9%

Agency

27%

53%

9%

4%

1%

0%

6%

Total

29%

46%

10%

4%

3%

1%

7%

Increase50%+

Increase25%-50%

Increase


are bringing some of their best branding positions that they had online to the mobile space and are differentiating themselves from the masses.

eMarketer: What advancements from last year will have a positive effect on mobile advertising in 2015?

Ahlberg: Viewability and accountability metrics are the biggest ones. Was my ad viewable? Did people engage with it? Those are the next-generation metrics that werent there on mobile 12 to 18 months ago.

Mobile has quickly caught up and advertisers can now say, I only buy viewable impressions. I only want to buy impressions that are going to be engaged with as opposed to having impressions that are below the fold or are never seen.

eMarketer: How important is viewability in mobile advertising?

Ahlberg: Its coming; its not there yet. Theres a large unnamed agency that worked with Cond Nast that said, Were only going to pay for 100% viewable impressions. Thats not really realistic in the web world yet, but agencies and advertisers are now saying enough is enough, lets clean up this oversupply.

You want to make sure that what youre buying is not only going to be seen, but also engaged with. Mobile is probably 12 to 18 months behind where the web is right now from a viewability perspective.

eMarketer: Where does the industry stand on establishing standards for mobile ad viewability?

Ahlberg: The industry has realized that viewability and accountability are an issue right now and that we need to self-govern ourselves.

To Properly Attribute Mobile Ads, Kill Last-Click Models

David Shim

Founder and CEO

Placed

David Shim is the founder and CEO of Placed, a location-measurement firm focused on pairing consumer behavior in the physical world with advertising exposures. Shim recently spoke with eMarketers Lauren Fisher about brands pressing needs to bring offline sales and in-store data into attribution models and why doing so is critical to proving mobiles value in the cross-platform equation.

eMarketer: How would you describe the current state of cross-platform attribution?

David Shim: The state of attribution is really not that great. In 2013 and early 2014 we found that most people

were still optimizing either off of clickthrough rate (CTR) or app installs.

Everyone knows CTR is a horrible metric to utilize on desktop, but when you go to mobile, its the easiest metric to measure and optimize against. But if you look at conversions that occur after a click on a mobile device, theres not much meat there. If you see an advertisement for a sweatshirt on your smartphone and click on a banner ad, are you really going to buy that sweatshirt on your mobile web browser? The answer is no.

What weve been finding is that campaigns like this arent even generating one-for-one in terms of return on investment (ROI). So for every dollar spent, you cant generate a dollar in revenue if youre a retailer measuring mobile off of CTR.

Everyone knows CTR is a horrible metric to utilize on desktop, but when you go to mobile, its the easiest metric to measure and optimize against.


But what weve seen in the second half of 2014 and into 2015 is an upswing in terms of clients wanting to know more about mapping mobile to in-store, and doing so at scale. That includes scale in terms of reporting as well as the ability to work across partners.

Its that scale piece that really points to something that that industry is missing at this point, which is a common currency. Weve got companies like Datalogix and dunnhumby, but their purchase data is only tied to loyalty cards. So with purchase data being so fragmented, its hard to decide how to attribute. Clients really want a common currency that works across all properties and sites.

eMarketer: How influential has mobile been to driving attribution forward in the last couple of years?

Shim: Very. Mobile is what is driving store-visit attribution beyond loyalty card data. There are a lot of places that dont offer loyalty cards, so it can be difficult to understand who visited those stores. Mobile can prove the missing link because it can tell you where people are going in the physical world and what theyre actually doing. With it, we can now connect the dots all the way from digital ad exposure to the store someone visited to the items they purchased.

eMarketer: What are marketers learning from this? What are some of the big insights theyre getting from this more complete attribution picture that they werent before?

Shim: For retailersanyone that has core business in the physical worldmobile can be a direct-response channel. By linking mobile to in-store performance, retailers are finding positive ROI vs. before, when they were attributing on CTR. Its really changing the way people think about mobile.

For retailersanyone that has core business in the physical worldmobile can be a direct-response channel.

To give you an example, we worked with a fashion retailer that was optimizing off of CTR with a secondary goal of clicking on find-a-store listing mobile pages.

They knew they needed to increase their mobile budgets because that was where their audience was, but they couldnt justify the spend because they werent converting on that digital device. They wanted to know if instead, they could map their mobile ad exposures back to whether or not someone entered a physical store.

The retailer actually went as far as to build a revenue model off of those store visits, assuming a certain portion of visits resulted in a sale and what they knew about the average order size. So internally they were able to justify what ended up becoming an 800% return on ad spend. They were then able to go back to their marketing team and show they were actually making money, not losing money on mobile as they previously thought. Over the next year, we saw their budgets increase by two to three times.

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