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Survey finds large portion of mobile ad dollars are wasted

ASPCA boosts donations via SMS

The ASPCA boosts donations via mobile

ROI and accountability are of utmost importance to brands and agencies, and while mobile advertising has proven its effectiveness when executed properly, click-through rate is a limited metric at best.

Forty-seven percent of mobile application users say they click or tap on mobile ads more often by mistake than they do on purpose, according to a survey conducted online by Harris Interactive on behalf of Pontiflex in December 2010. Given that mobile advertising models typically charge advertisers for clicks, the survey findings indicate that a large portion of mobile ad dollars are wasted.

“What this study is showing, you can’t just map online advertising onto the mobile environment and get a good result,” said Zephrin Lasker, cofounder/CEO, Pontiflex, Brooklyn, NY. “Some of the things that just do OK in an online environment do even more poorly in a mobile environment.

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“The vast majority of mobile advertising is sold on a cost-per-click basis, and the vast majority of people clicking on mobile banner ads are clicked on by mistake,” he said. “The results are pretty astounding—47 percent of people said that they click on mobile ads more often by mistake than on purpose.

“Within the mobile space, there has to be an answer where advertisers can get what they pay for.”

Mobile-only usage uptake impacts marketing: Harris

Married to the mobile

Harris Interactive, a global market research firm based in New York, conducted two online surveys in the United States.

The first was conducted from Dec. 14-16 among 2,052 adults ages 18-plus, and the second was conducted from Dec. 27-29 among 2,118 U.S. adults ages 18-plus.

Pontiflex is a mobile, email and social acquisition platform. Clients that have run mobile campaigns to build their email databases include Tommy Hilfiger, Kimberly-Clark’s Huggies and the ASPCA.

Harris/Pontiflex poll mobile consumers
The survey found that 71 percent of mobile application users stated that they prefer ads that keep them within the application they are using, instead of ads that take them out of the app to a mobile Web browser.

Those results further reinforce the need for mobile advertising to move away from a model based on clicks, per Pontiflex.

With more than 10 billion applications downloaded, both free and paid apps for the Apple and Android platforms have registered explosive growth.

According to the Pontiflex survey, 95 percent of mobile application users have downloaded free apps and 41 percent use paid apps.

This trend is prevalent even among more affluent demographics – 96 percent of mobile application users with household income of $75,000-plus said they use free apps.

The strong consumer usage of free applications highlights the importance of in-app advertising, which has emerged as an important revenue stream for publishers and app developers, providing an incentive to help keep apps free.

The findings of this survey have important implications for mobile marketers, per Pontiflex.

Mr. Lasker said that with the high incidence of accidental clicks, advertisers cannot continue to use traditional online ad units and measurement models – namely banners and click-through rates – as a way to deploy and measure the success of mobile campaigns.

Furthermore, the survey suggests that advertisers should deploy in-app advertising models to engage consumers in a way that is consistent with their preferences.  

The survey also found that 61 percent of mobile application users ages 18-34 click or tap on mobile ads by accident more often than on purpose.

Almost two-thirds of mobile application users selected ads that contain coupons, deals or newsletters as their preferred in-app mobile ad type, per Harris.

While mobile applications are popular across all age groups, usage is highest among users ages 18-34.

The ASPCA and Southwest Airlines use Pontiflex AppLeads to run mobile signup ads within a variety of applications. 

Signup ads let people opt-in to a campaign or email newsletter without having to click out of the application.

“We do mobile advertising on a cost-per-signup basis on Android and iPhone platforms, spanning hundreds of mobile developers and thousands of applications,” Mr. Lasker said. “Advertisers only pay when someone signs up to get more information from the brand and enters their first name, last name, email address and ZIP code.

“The survey found a huge preference towards coupons and email newsletters, with 63 percent of people saying they are interested in those,” he said. “A low 15 percent of people surveyed said they are interested in mobile video ads, probably because it can take a long time for video ads to load within an app and many are not easily skipped, which gets in the way of the experience.

“People like getting discounts, and they are willing to give their email address in exchange for value.”

Final Take
Pontiflex App Developer Workshop

 
Related content: Research, click through rate, CTR, cost per click, CPC, cost per acquisition, CPA, cost per lead, CPL, Pontiflex, Zephrin Lasker, Harris Interactive, mobile advertising, apps, applications, Kimberly Clark, Huggies, Tommy Hilfiger, ASPCA, mobile marketing, mobile

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Comments on "Survey finds large portion of mobile ad dollars are wasted"

  1. Concerned Marketer says:

    February 10, 2011 at 11:18am

    Given the meteoric rise in supply of mobile ad inventory, mobile advertising is an excellent value option now for marketers. Unfortunately, there are a huge amount of accidental clicks for which they are charged. Most people in the mobile space will admit this. They know the apps that purposefully drive accidental clicks from users. The numbers of a third party study are statistically relevant and do not lie. This does not mean that campaigns are not effective and fail to deliver their CPA goals (though in my experience there is huge attrition from click to action). It just means that a CPC pricing model is wrong, or the ads need corrections to stop counting accidental clicks. Google experienced this in their early days and have tried to correct for it. Obviously google works. they are also correcting for it now by adding a button when someone clicks that says "are you sure?" The first step in recovery is recognizing there is a problem. Denying it will only make it worse.
  2. Paul Childs says:

    February 8, 2011 at 11:17am

    With regards to the issue of accidental clicks, while mobile ad campaigns, as with any online campaign, will inevitably drive a certain number of them, the suggestion that this figure is anything like as high as 47% is simply not the case.

    The idea that mobile ad campaigns deliver audiences of whom almost half arrive accidentally and are irrelevant to the advertiser, is not difficult to disprove through some simple analysis of user activity beyond that initial click . Through our post-click tracking, we know that audiences are going on to actively engage with brands and perform pre-specified actions. App install tracking for example, enables our advertisers to measure not only how many times their iPhone or Android app is clicked on, but also the number of downloads and first opens that are generated post-click.

    Networks such as Adfonic work closely with publishers to ensure that ad placements are contextually relevant to the surrounding content and along with other sophisticated targeting mechanisms we can ensure that ads are served to a highly targeted audience with a high propensity to click on the ad in question.

    Advertisers commonly give us CPA and CPI targets to work to, and the fact that these targets are being delivered provides concrete proof that mobile advertising delivers relevant and valuable clicks. We’re seeing more and more brands coming on board and increasing their mobile advertising budgets based on this evidence.