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Mobile ad performance, spend get boost from holiday rush

Mobile improves effectiveness of advertising: Thin

As consumers spend more time with their mobile devices this holiday season to shop and research recipe and decorating ideas, advertisers are following suit, increasing their mobile ad spends.

Consumers moved their holiday shopping online and onto smartphones and tablets in the weeks leading up to the Thanksgiving holiday, which is reflected in a 307 percent increase in mobile search advertising spend on smartphones and a 231 percent increase on tablets compared with the same period last year. In comparison, search advertising spend overall so far in the fourth quarter is up only 15 percent.

“It is not surprising to see the increase in spend on mobile, especially for retailers for whom tablets are a very attractive advertising channel, as they result in high engagement,” said Roger Barnette, president of IgnitionOne, New York. “Advertisers want to be where consumers are – and consumers are spending more time on smartphones and tablets.

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“Based on the huge increase in spend on these ads this quarter compared to the same time in 2011, it is obvious that mobile is playing a much bigger role,” he said. “This Q4 so far mobile makes up 17 percent of the paid search budgets – when at this point last year it was only 7 percent.”

A social event
The cost per click for smartphones and tablets is steadily increasing as well, per Mr. Barnette.

Mobile advertising on social media is also getting a boost from the holidays, with Facebook mobile advertising campaigns run through Nanigans experiencing a 360 percent increase in click through rates on Thanksgiving day through Cyber Monday as compared to the same period during the prior week.

On a daily basis, Cyber Monday saw the greatest jump with a 733 percent increase week-over-week.

The holiday shopping frenzy is driving up mobile ad rates and spending in other areas as well.

Mobile ad network RevMob reports that the cost per install bid in the week before Nov. 21 grew 36 percent week on week and 35 percent month on month. This indicates a strong interest in user acquisition by app developers.

CPI bids peaked on Black Friday, up 41 percent in comparison to an average day.

Year-over-year, the CPI bids grew 49 percent.

“We think that the cause for this is a more mature ecosystem where they are more advertisers that have games from different categories and also non-game apps that they are testing in more geos and more devices,” said Gui Schvartsman, CEO of RevMob.

“Due to the increasing sophistication on their end, they are able to spend more,” he said.

Post-holiday rates
The effective cost per thousand impressions during the same period grew 41 percent week over week, 55 percent month over month and 78 percent year over year, per RevMob. This reflects how marketers are bidding more aggressively as the holiday season gets underway and that consumers are responding to ads.

“Advertisers wanted to leverage the fact that lots of users just acquired new devices,” Mr. Schvartsman said. “As usual, the first thing they do is to open the app store and download some apps.

“There is a great potential to acquire users that have never played any games on mobile,” he said. “These users can be very valuable to advertisers.”

Mobile ad rates are expected to level out somewhat through the end of November and into early December and then increase dramatically in the rush before Christmas.

While levels will settle out once again in January, they are likely to not go as low as pre-holiday levels.

“Because advertisers from the physical world will raise their bids, there will be more demand on the bid side and game developers, if they want to keep their volume, will have to raise their bids a bit,” Mr. Schvartsman said.

“We expect this to happen with more intensity in December, especially on Christmas weekend and on Christmas day, when it could grow five times compared to the average for a normal day,” he said.

“In January, we usually see a reduction in the CPI. It won’t go back to as low a level as in the previous year mostly because it is a growing market.”

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

 
Related content: Advertising, Mobile advertising, CPCs, CPIs, eCPMs, paid search, Facebook, IgnitionOne, Roger Barnette, Nanigans, RevMob, Gui Schvartsman, mobile marketing, mobile

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