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Mobile ad spend, rates will trend upwards this holiday season

Mobile ad budgets are likely to get a big boost this holiday season as retailers and brands look to reach busy shoppers on the one device that is always nearby ? their smartphones.

Savvy brands will funnel more money toward mobile during the holidays in recognition of the growing role that mobile plays in the shopping process. This in turn could drive mobile ad costs up as brands compete to reach specific mobile audiences.

?We?re expecting to see a big spike in mobile advertising this holiday season, starting with Black Friday,? said Dave Martin, senior vice president of media at Ignited, El Segundo, CA.

?It?s hard to predict exactly how big, but I wouldn?t be surprised if we saw 50 percent more spending compared to the same time period last year because of an overall increase in mobile budgets, as well as new brands coming into mobile for the first time,? he said.

?The biggest of the season will still be retailers and software, but I think we?re going to see a big jump in other categories like financial services and automotive as well.?

Mobile Sunday
The amount of money spent on mobile advertising has been slowly increasingly over the past couple of years but still does not match how much time consumers spend on these devices. However, this holiday season marketers that already have a presence in mobile will increase their spend here while some brands are likely to be jump into mobile for the first time.

The uptick in mobile advertising has already begun in anticipation of Black Friday, when consumers typically do a lot of their holiday shopping.

One of the biggest days of the year for mobile advertising could be Sunday, Nov. 25, as marketers look to drive awareness in advance of Cyber Monday ? the first day back to work after the holiday weekend ? when many consumers go online to shop for holiday deals.

?In fact, the Sunday before Cyber Monday last year was the highest mobile traffic day of the entire year on our platform, as consumers were researching products and hunting for the best deals,? said Marcus Startzel, general manager of North America at Millennial Media, Baltimore, MD. ?Advertisers have noticed the increased role mobile plays in the shopping experience, and are responding by shifting spend from traditional channels.?

Retailers embrace mobile
U.S. retailers, in particular, are already active mobile advertisers and are likely to continue their leading role during the holiday period.

Brands in the financial, entertainment and travel sectors are also expected to increase their mobile ad spend during the holidays.

?The performance and click through rates of mobile advertising in Q3 2012 shows that the North America market is now the leading geo worldwide in terms of the effectiveness and value of retail led mobile advertising with a 46 percent above average click through rate for retail mobile advertising occurring across Q3,?said James Macdonald, general manager for USA at Adfonic, New York.

?Black Friday, as well as the holiday period in general in North America will drive even steeper growth in high performance retail led mobile advertising in North America during Q4,?he said.

Ad rates could rise
The holiday period could also see an increase in mobile advertising costs as demand increases. The low ad rates in mobile have been a persistent issue for the space as inventory continues to outpace demand.

Marketers may find they need to bid higher to compete for the specific traffic they are looking to reach during the holiday season.

?There will definitely be an increased demand for premium mobile inventory over the holiday season,? Ignited?s Mr. Martin said.

?So in any environments where advertisers are competitively bidding for impressions or clicks, we should see an uptick in the bids needed to win the best inventory,? he said.

?But there?s also still a massive amount of unsold inventory being moved through mobile ad networks that should stay reasonably flat as these networks help new advertisers test the market.?

Some marketers will be looking to get in front of consumers as they use their mobile device insides store to compare prices. This is an optimal time to reach consumers because they are already looking to make a purchase.

?The holiday season overall is gearing up in mobile advertising and we expect it to be more buoyant than last year and deliver growth from advertisers looking to take advantage of an audience now more than ever before engaged with ?showrooming? and also price checking in store on mobile devices, in their quest for the best retail deals,? Adfonic?s Mr. Macdonald said.

Strong mobile experiences
As mobile advertising becomes more popular, it is important for brands to create mobile experiences that catch the consumer?s attention and drive engagement. This is especially important in the mobile space, where the small screen size on smartphones can be a challenge.

Rich media and mobile video are a growing focus for marketers in the mobile space, a trend that is likely to continue through the holiday season. However, the predominant format is still likely to be banner ads inside mobile apps and on mobile sites.

However, there is also growth in mid-page units, full page ads and leader board formats for performance, sale oriented campaigns, per Adfonic.

Marketers are also likely to put more of an emphasis on targeting their mobile ads to the right audience as targeting capabilities in the mobile space get more sophisticated.

?The other major trend that we see impacting this holiday season is the increase in brands targeting specific audiences,? Millennial Media?s Mr. Startzel said. ?Rather than only focusing on building great creative, brands have recognized that they need to deliver this creative to the right people, in the right place, at the right time, and they have found that mobile gives them an opportunity to do so."

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