It's a freight train, and it's coming fast. A recent comic strip from Adexchanger sums up quite well the growth in mobile, and how it's affecting publishers and advertisers alike.
With behavior and layout different in mobile, publishers have been required to rethink their overall product, and in turn, their ad products. The current landscape, with some exceptions discussed later, still holds to the traditional banner model. Many ruin user experience by requiring multiple page views to consume short pieces of content, trying to increase the lifetime value of users through clunky mechanisms. This simply doesn't cut it anymore.
Mobile "Shmobile" Market Share
In the latest mobile ad revenue report from eMarketer, Google has a stronghold with an estimated 53 percent market share for 2013. According to Q3 earnings, roughly 40 percent of traffic to YouTube was occurred on mobile devices versus 6 percent two years prior. Stronger CPMs for pre-roll advertising is helping to contribute to their strength in the marketplace. Though, the 2013 figure is partially due to a change Google made in February to it's AdWords business that disallows advertisers from targeting desktop/mobile separately, thus forcing ad dollars onto mobile. This change somewhat skews the true leaders in the space.
Google may be able to leverage their hold of the desktop to benefit them on the mobile side, but if they do not innovate the ad products they currently offer, they will lose market share to folks that are. And while Google ads run on numerous sites/mobile sites, trying to spark mobile innovation across properties in which they do not control stymies efforts.
What is recognizable in the eMarketer numbers is the tremendous growth in Facebook's mobile revenue. In Q2 2013, Facebook's mobile revenue accounted for 41 percent of total revenue. What makes this even more incredible is that 2012 was the first year Facebook had any mobile offering. When looking at quality versus quantity, Facebook is by far the leader in the space. Their scale allows them to truly go above and beyond the banner in a way Google cannot. For example, Facebook will soon be testing autoplay video ads in their newsfeed and they will soon look to monetize Instagram.
What's interesting in the eMarketer numbers is the declining growth attributed to "Other." There are fewer players in the space that own the market and when looking at Millennial Media's share (considered a big boy), they only take home 0.72 percent of the market. Unfortunately, these companies share the same lack of control with regard to ad products on third-party sites that we see with Google.
What Mobile Market Share Doesn't Address
While these numbers look at the leaders in the mobile ad space, they don't touch on the issues and concerns plaguing publishers and advertisers.
Complicating things even further are the misaligned goals between publisher and advertiser. Publishers are trying to grow audiences in the hopes of monetizing; once they reach critical mass, advertisers want out of the box (intrusive) custom integrations that drive users away. On the desktop side of the business, these integrations are more palpable to users, due to larger screens and callousness towards ads. With mobile though, the limited real estate hinders these ad products and in addition, user expectations are different.
So what can publishers and advertisers do today to get ahead of the mobile freight train?
Other Ad Formats:
The Real World
Two real-world examples of publishers employing strategies like the above are ESPN and Buzzfeed. Now, there are other reasons contributing to the success of each in mobile; ESPN has scale and an essential monopoly in the sports space, and Buzzfeed was way ahead of the curve with regards to the native advertising space and is a true leader in virality. What they highlight as examples of publishers though is their success despite their polar opposition in strategy. Simply, what works for one publisher may not work for another.
ESPN constantly sells full page and 300x250 interstitials. You can see their video section focuses on shorter snackable pieces and every post will include a video, as well. Lastly, they sell sponsorships around certain sections/sports, typically giving an advertiser 100 percent share of voice along with logo integration.
Buzzfeed sells native content to advertisers and ties their deals to a context, i.e., 15 Amazing Superpowers That Shelter Pets Have, sponsored by The Shelter Pet Project (essentially cat memes). There is heavy emphasis on other advertiser groups and you can see many of their sponsored stories are from publishers.
Lastly, Buzzfeed concentrates their editorial strategy on lists; snackable content fit for the shortening attention spans of their audience.
Most publishers will not meet the criteria of the above examples (where most publishers fall); their answer is somewhere in between.
Having dedicated sales teams will always help (or mask short-comings), but publishers who do not have these resources available to them should look for products they can implement through third parties. The key here is to know your audience. Compartmentalize your audience based on medium of consumption. Offer separate experiences based on the user and optimize to those ad products that maximize ROI.
In the new mobile reality, publishers and advertisers are being forced to engage users in different fashions. Some strategies will work and others will not. While a young market allows for innovation, it also comes with risk, so move swiftly, try everything and stick with what works for your users.
Editor's note: updated to add information released in Google's Q3 2013 earnings call.
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Omar Nicola serves as the Senior Director of Corporate and Business Development for Evolve Media where he oversees all business and strategy related to its Crowd Ignite division. In his role he is responsible for managing a team of 12 employees in the areas of business development, account management, and editorial. During his time he has helped grow distribution for the platform by over 400 percent to close to two billion PVs with an audience of over 15 million monthly unique users.
Working closely with company stakeholders in all divisions of Evolve (TotallyHer, Craveonline, and Springboard Video), Omar also assists in the establishment of large scale partnerships/acquisitions that drive company growth and profitability.
Prior to his tenure with Evolve, Omar held positions in a range of capacities (including finance, business development, monetization, and strategy) at Morgan Stanley, Myspace Music, Mojiva, and various digital startups/networks. Omar holds an undergraduate degree in Economics from the California State University of Northridge.
March 19, 2014