Welcome to Mobile Marketer. Skip directly to: main content, navigation, search box.
  • Email this
  • Print
  • ARTICLE TOOLS
    SPONSOR
  • Please click here to learn more!

Receive the latest articles for free. Click here to get the Mobile Marketer newsletters.

Do upfront media buys have a place in mobile advertising?

Range Rover iAd

The minimum iAd buy has been repeatedly lowered

While the growth in mobile advertising is driving interest in automated buying, some publishers are pushing for upfront media buys. One possible scenario would see brands bidding in advance on premium inventory, offering similar targeting benefits as programmatic buying.

As mobile ad budgets grow and mobile experiences improve, it makes sense that some brands could want to bid on premium mobile ad space in advance. However, this is essentially what Apple tried and failed to do with iAds, which launched in 2010 with a $1 million minimum buy, but was forced to repeatedly lower the price because marketers were not biting.

“To date, mobile properties have lent themselves more to placed ads rather than strategic partnerships due to the capabilities and usage of the form,” said Gabe Misarti, chief strategy officer at agency Tris3ct, Chicago. “While we are now seeing increased opportunities with the medium resulting in greater buzz about upfronts, we do not expect to see mobile leading the charge with upfronts,” he said.

Sign up to receive Mobile Marketer Daily. The premier mobile marketing publication. Free!

“With the added contextual information of location and constant contact with consumer, programmatic buying on mobile is appealing to advertisers,” he said. “For brands looking to effectively day-part or connect with their target in the context of their daily routine, programmatic mobile marketing offers many potential benefits.

“In reality, marketers still perceive it as an area of test-and-learn, meaning upfronts represent a barrier to wider adoption.”

The right timing
Apple’s iAd has not had a big impact in the mobile advertising space, pointing to the reluctance of marketers to commit big upfront budgets for mobile advertising.

Last year, iAds had approximately a 3 percent share of mobile advertising compared to 54 percent for Google.

However, the industry has evolved significantly in the several years since iAds was introduced, with higher adoption rates, users spending growing amounts of time on mobile, significantly improved user experiences and ad units.

While many marketers are still not spending proportionately on mobile advertising compared to how much time users spend on mobile, budgets are expected to grow significantly over the next few years.

As more marketers begin to commit larger portions of their budgets to mobile, there may come a time when advertisers will be competing for premium mobile ad inventory.

“Quality media is quality media,” said Jeremy Sigel, client director for mobile at digital agency Essence, New York.

“There will always be a need and desire for upfronts from players like Yahoo and AOL,” he said. “As mobile grows, upfronts will grow, in particular as advertisers gain learnings and become increasingly comfortable with mobile media partners.”

Return on investment
Yahoo and AOL are among the publishers pushing digital ad upfronts.

There are some challenges associated with upfront buying, including that the return-on-investment may not be there for some brands.

“Yahoo and AOL have always been big on pushing large upfront buys, which is no surprise given the massive amount of inventory under their control,” said Ratko Vidakovic, director of marketing at SiteScout, Toronto.

“For certain marketers, this has always been a great way of reaching their objectives, especially when the needs have been related to guaranteed reach and volume,” he said.

“The challenges with upfront buys is that they are usually priced higher than through auction-based platforms like RTB, which can make it harder to achieve ROI goals for some.”

Gaining efficiencies
However, there could be efficiencies to be gained by combining upfronts with programmatic buying.

The key will be enabling larger brands to gain access to premium content while also offering advantages such as real-time targeting.

“I believe advertisers will always be willing to spend a large portion of their budget for upfronts, especially if they think they'll get a better deal in the long run with guaranteed ad placement,” said Seth Hittman, CEO of Run, New York.

“Mobile is no different: Mobile upfronts will grow as mobile advertising grows,” he said.

“The premise behind this that advertisers want to receive a unique value in return for their spend, and upfronts challenge the status quo. Those details will be worked out by the publishers and brands, in a collaborative manner, as we move forward.”

Mobile upfront buys will need to provide marketers with unique benefits or there is not much incentive for them to shell out the money.

Not everyone is convinced the two belong together.

"The very notion of upfronts collides with what makes programmatic so powerful, the ability to target specific users anywhere you want, in the sequence you want, with controls for things like frequency and transparency across the entire ecosystem," said Brian Krick, head of search and biddable for North America at Essence.

"Generally speaking, programmatic upfronts sound good if you are a publisher or an agency, less so if you are an advertiser," he said.

"We always think about creating and maximizing the value of first-party data as foundational to any programmatic strategy. The value that a publisher like AOL or Yahoo! bring to that may be limited in comparison to the commitment they are asking for."

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, upfront media buys, programmatic buying, Tris3ct, Gabe Misarti, Essence, Jeremy Sigel, SiteScout, Ratko Vidakovic, RUN, Seth Hittman, mobile marketing, mobile

  • Trackback url: http://www.mobilemarketer.com/cms/trackback/16193-1
  • | Follow us on Twitter |