Value of small banner ads is over-estimated
By Chantal Tode
November 21, 2012
In these early days of mobile advertising, marketers face several issues, such as accurately tracking results and dealing with high accidental click rates. Increasingly, advertisers are also faced with picking the best ad unit as viable choices grow.
Banners have traditionally been the go-to ad unit in mobile advertising, offering advertisers abundant inventory and relatively low rates. While full-screen interstitial ads can provide a better user experience in some cases, available inventory has been low.
In a conversation with Mobile Marketer, Greystripe senior director Dane Holewinski discusses why the time may be now for advertisers to take another look at full-screen mobile ads and why he thinks the value of mobile banner ads is over estimated.
What are some of the challenges that brands are facing in mobile and getting their message across to users?
When most advertisers think about mobile advertising, they think about the small banner ad. That has limited real estate and limited ability to communicate a message. Also, with small banners, it is estimated that maybe up to 50 percent of clicks are errant clicks.
Some of the other challenges are related to data and tracking in mobile. Cookie tracking is not the same in mobile applications as it is on the Web. This is something that the industry in general needs to address.
What are the benefits of full-screen mobile ads?
The banner ad unit is very small and it doesn’t provide advertisers much real estate to communicate a message to the users. There is also a huge supply and demand imbalance in the marketplace. There is a lot of available inventory for banner ads but the current fill rate is estimated at less than 20 percent.
Full screen interstitial ads and the larger ad units in mobile allow an advertiser to overcome some of the short falls of the smaller banner. First, it is a larger ad unit, so it allows an advertiser to communicate a full message to their user, clear call to actions, and with rich media, to really engage the user in the ad unit itself.
We’ve also seen that there are less errant clicks with full-screen ads.
How do these factors translate to results and cost?
Full-screen ads generate a lot more value for advertisers. We have found that the conversion rates on the back-end tend to be somewhere between 50 percent and 100 percent greater on full screen ads. And in terms of brand awareness, we consistently see lifts in brand awareness metrics of 50 to 100 percent.
We have done some research on our network and we find that our interstitial ads tend to deliver about five times the eCPM of smaller banner ads.
If full-screen ads are so great, why are more advertisers not using them?
Historically, scale was one of the limiting factors for these full screen interstitials. As the market has grown and the available inventory for has grown it is now a very scalable solution.
Also, a lot of the rest of the industry is focused on small banner ads – that is what they are selling, so some times it is challenging for advertisers to step back and compare the value of the two ad units especially when a majority of the vendors in the market are almost exclusively pitching that small banner.
This is complicated by tracking issues in mobile. While we have some really good data about conversion and the value of a click from a interstitial ad, advertisers aren’t always that sophisticated. They don’t have the tracking mechanisms in place and a lot of the measurement of the value of mobile advertising is based on click through rate.
We don’t think that is a very good measure especially given the number of errant clicks for small banner ads.
Because we are still using relatively rudimentary measurement, such as click through rate, the value of small banners is over estimated because of errant clicks.
As we continue to evolve and have better tracking mechanisms in place and are able to better communicate the true value of a click from an interstitial ad versus a click from a small banner ad, the industry will continue to come around to valuing these full screen interstitial ads much more highly.
Chantal Tode is associate editor on Mobile Marketer, New York
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Comments on "Value of small banner ads is over-estimated"
Devon George says:
November 29, 2012 at 2:16pm