Days numbered for mobile banners as brands embrace native advertising
Hefty investments from Mondel?z and Omnicom last week suggest that marketers may finally be ready to kill off the mobile banner in favor of social media-driven, native ad placements.
On Friday, Ad Age reported that Facebook-owned Instagram?s inked a $100 million deal with Omnicom, the first large-scale partnerships for the mobile photo-sharing application. Over the weekend, Bloomberg reported that the value of the partnership was actually $50 million, and Adweek claimed that the deal clocked in at $40 million. At the same time, the cost of advertising on Twitter is down 18 percent, showing how there is a range of opportunities in native advertising.
?Twitter and Facebook are clearly at different maturity stages as it relates to monetization,? said Nathaniel Perez, global head of social at SapientNitro, Boston.
?Facebook today looks much more like a direct network, which supports programmatic buying and a variety of formats,? he said.
?Twitter, on the other hand is evolving and introducing new formats, focusing on different verticals and media, such as TV. That said, these players are in a very different value generation game. That tends to drive a difference in their offering price, which isn't truly a reflection of their potential as advertising platforms.?
Omnicom is rolling out a year-long advertising program with Instagram for brand clients. Omnicom?s creative and media agencies BBDO, DDB and OMD will all be involved in the program.
The Instagram ads, which consist of images and will also likely soon include 15-second video posts, will reportedly remain within a consumer?s news feed for a set period of time.
Omnicom will also work with Instagram on the targeting and measurement options for the ads.
Big brands such as Levi?s, Lexus and Ben & Jerry?s were among a handful of advertisers that began testing the ads last year with some initial results suggesting that they are effective in building brand awareness.
For example, Ben & Jerry?s sponsored post saw a 33 percent increase in recall lift, reaching 9.8 million consumers.
In September 2013, Instagram reported that it had more than 150 million monthly users, and in December said that 50 percent of this group was accessing the app on a daily basis.
Omnicom sees this group of engaged users as a significant opportunity for brands to leverage native content that fits into a feed of photos that they are already accessing.
Also last week, Mondel?z International signed a big global partnership with Facebook to give the marketer preferential rates, the first looks at new advertising products, custom data insight and educational opportunities for the CPG brand?s employees (see story).
Similar Facebook deals between NBC and American Express suggest that Facebook is attracting significant budget spend from big brands, but that does not mean that smaller brands are not leveraging Facebook, too.
?I don?t think pricing is the key driver of using Twitter or any other platform,? said Bill Reynolds, executive vice president of media and analytics at Erwin Penland, Greenville, SC.
?Each serves overlapping but different purposes, and to some extent they serve different audiences,? he said. ?Matching the user profile to the brand need is important; so is the type of engagement.?
Slowing down tweets
At the same time that Facebook is luring in big brands, H&M, Macy?s and Samsung are all big brands that are betting on Twitter to increase brand awareness and sales.
These media buys are also often made in real-time around cultural or entertainment events, according to a presentation by Chris Reidy, senior sales manager at Twitter, San Francisco, at eTail West 2014 last week.
For example, Macy?s leveraged Twitter during the recent Oscars to share thoughts about the show?s fashion.
On the other hand, H&M used Twitter to amplify its big Super Bowl XLVIII TV spot that debuted a new menswear campaign from David Beckham. As opposed to Macy?s, H&M planned its Twitter campaign weeks before the Super Bowl game.
Additionally, alcohol and entertainment brands that want to latch on to a specific moment make sense on Twitter.
?There are some brands that are driven by reach and efficiency, while others prioritize relevancy and context,? said Alexis Berger, Chicago-based vice president of marketing and Midwest sales at Kargo.
?For a reach brand, Twitter may better align with their strategy,? she said. ?The platform is optimal for an entertainment or alcohol brand with a high-profile spokesperson who are seeking buzz and virality.?
As Twitter attracts the attention of big brands, the cost to advertise on the platform is down significantly this year, according to Twitter?s annual report from last year.
During the last three months of 2013, the cost to advertise on Twitter dropped 18 percent and is down 81 percent from 2012.
Despite the lower costs, Twitter raked in $243 million during the last three months of 2013. Seventy-five percent of revenue comes from mobile ads.
This suggests that while it is getting cheaper for marketers to advertise on Twitter, marketers may not be getting as much value out ads.
Twitter was early on board with the native advertising trend, but with every other social media company offering similar ads nowadays, the novelty of the promoted or cross-screen tweet could be waning.
At the same time, Twitter?s smaller user base is significantly more engaged than Facebook?s, which is of particular interest to marketers.
?Value doesn't mean cheapest,? said Barry Lowenthal, president of The Media Kitchen, New York.
?In fact we're happy to pay high CPMs for the right audiences who take the right action,? he said. ?Twitter provides lots of value for many brands, especially those trying to reach very engaged specific audiences. Not only is Twitter's audience engaged, they also often demonstrate intent, which is very valuable to advertisers.?
Lauren Johnson is associate reporter on Mobile Marketer, New York