Is bigger better? Mobile marketers right-size their efforts

Larger format mobile ads have taken off in the past six months, pointing to growing mobile use, bigger commitments from brands and increasing creativity in mobile ad placement.

Mobile advertising platforms are reporting a significant growth for 480X320 mobile ads compared with smaller 320X250 ads units that started happening at the end of 2012 and into the beginning of 2013. This development is happening as mobile is attracting bigger budgets and more marketers intent on making an impact with smartphone users.

?It is not an accident that Facebook increased the size of content in its news feed as it focused on integrated advertising into that experience,? said Paul Gelb, head of strategy at MoPub.

?In Q1 2013, the CTR of 480X320 ads were almost 10X the CTR of smaller standard 320X250 ad units,? he said. ?CPM increased 161.8 percent and ad spend share increased 214.7 percent for 480X320 impressions.

?Larger ads were better at capturing attention and were leveraged effectively in turn based games.?

Demand grows
The small screen size of smartphones is one of the biggest challenges marketers face with mobile advertising. Coupled with the fact that users are often engaging with their devices on the go only increases the need for mobile ads to grab a user?s attention for it to be effective.

To date, much of mobile advertising has consisted of traditional desktop banner ads that have been shrunk down to fit on a mobile screen.

Not surprisingly, the engagement rates have been low.

Human Demand, which provides a self-serve mobile ad delivery platform, reports that demand for larger ad formats is increasing.

?We have seen 3X the demand for large format mobile ads over the past 2 quarters vs. the previous two quarters,? said Howie Schwartz, CEO of Human Demand.

?Large format ads on mobile also command a higher CPM which is also beneficial for the developer / publisher as they will receive more revenue vs. smaller 320x50 'default' banners,? he said.

Getting creative
The fact that the demand for large ads is increasing reflects that the growing use of mobile devices to consume a variety of content, the increasing creativity of the mobile ad industry to insert full-screen ads in new places and the growing commitment of brands to invest in mobile advertising.

One reason for the growth in larger format ads is marketers are getting more creative at finding ways to deliver these ads.

For example, MoPub reports that one of the factors driving the performance of 480X320 mobile ads is game developers who have begun delivering larger sized interstitial ad formats in turn-based games. Since many of these games have significant penetration and usage, the trend has been accelerating.

Good news
The trend toward larger ads could be a good sign for publishers companies such as Facebook, Pandora, Google and others, who have struggled to make the money from mobile advertising because the ad units typically cost significantly less than on desktop.

MoPub reports that larger ad formats saw their share of mobile ad spend increase 215 percent from January to March while the ad share spend for smaller ad units decreased 13 percent in its Mobile Advertising Marketplace Report Q1 2013. At the same time, the overall ad spend in mobile is growing at a healthy pace.

While larger ads certainly are a step in the right direction, the challenge is that developers and publishers are reluctant to serve too many full-screen interstitials per user session for fear of turning off users. However, it is possible to serve a much larger number of small banner ads.

Size is not everything
As a result, it may take more than simply up-sizing for mobile advertising to reach its full potential.

Mobile ads also need to be take advantage of location and other use information to deliver relevant ads that add value to the user?s experience. The market is still in search of creative solutions to the issue of capturing attention and driving engagement on mobile.

In the short term, it is apparent that larger ad formats such as interstitials are doing a better job of helping marketers make an impact.

?Ad size is very important related to effectiveness/performance,? Mr. Schwartz said.

?On smartphones the typical banner is 320x50 - larger ad formats such as 300x250 or even better full screen interstitials such as 320x480 and 480x320 will yield much higher engagement rates,? he said.

?On tablets the typical banner is 728x90 - full screen interstitials including 768x1024 and 1024x768 are gorgeous high def quality creative and yield very strong engagement rates.?

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