The Mobile Mushroom

eMarketerNow common knowledge, the rapid growth of digital has meant the declining rate of traditional media consumption. Mobile in particular has increased in share – by 2015, mobile content consumption will finally exceed desktop use[1].

 

The continued shift to mobile has some unfortunate implications for many publishers, especially those that aren’t ready to act. From the outset, the significant difference between CPM on desktop vs mobile has led to the inevitable decline of revenue – in American, CPM on mobile is only $0.62, less than a quarter of a desktops worth[2]. And with an ever-growing percentage of users reading news on smartphones and tablets, this is particular worrying for publishers.

 

An American online magazine, The Atlantic, have seen 30% of their traffic come through mobile devices yet only 10% of revenue (at most). While Scott Havens, president of the magazine, acknowledges media is an industry that generally follows behind user-consumption patterns, he believes currently minimal mobile ad rates can be maximised through creative strategy. In an attempt to shorten the revenue gap, The Atlantic considered moving towards native ad-units and utilising pre-roll advertisements in video news[3].

 

This acknowledgment is promising, yet these mere attempts alone are not nearly enough to combat the revenue issue. Publications must embrace mobile and invest in better executions to attract more advertisers to the medium and are encouraged to follow the controversial footsteps of the likes of Facebook and The New York Times. Both have tackled the digital landscape by implementing forward thinking initiatives involving the monetisation of mobile applications.

 

Paywalls were created as an added revenue stream to counter the loss from print sales. While cynics condemned the paper for charging what could otherwise be found online for free, The New York Times have enjoyed $37.7m in revenue from paid content. Indeed, their digital subscriptions surpassed digital ad revenue for the first time last quarter2. And although the paywall was not in direct response to increased mobile traffic, their quick reaction proves that palpable gains can be generated in this area.

 

Like The New York Times success, Facebook is reaping rewards from its new ecommerce solution. 41% of the site’s revenue is attributed to mobile – up 52% from Q2 the previous year. By understanding consumption developments, Facebook  was able to leverage the mobile habits of users and this made mobile a key pillar to success this year[4]. Despite the sheer audience size of Facebook  (the equivalent of being the ‘third largest country’[5]) the utilisation of mobile ads is scalable to national and local media publications should firms look to implement certain processes…

 

While each market and publication have different variables to take into account, the below suggestions should feature in all news apps or responsive sites for mobile devices. These recommendations are based on inXcess’ experience within the mobile space and from observing the strategies of our publishing clients:

 

  • GEO targeting:  There is a resurgence in consumer opt-in database acceptance (but only when advertisers offer a relevant value proposition)[6]. GEO targeting allows a more efficient and relevant campaign and has therefore been termed ‘the biggest revenue hope for locally focused media companies through 2015’1 – a proven argument given that location based messages, on a review of 2,500 mobile campaigns, received twice the industry click through rate than those without[7].
  • Customisation: Avoid in-screen clutter by only using relevant ad formats and refrain from irrelevant advertisements as consumers learn to ignore content6.
  • Rich media: Rich media elicits a stronger user experience. Its interactive nature allows for a more memorable message and obviously, higher levels of engagement.
  • Understanding new consumption patterns: News is now consumed over 16 hours a day – but for shorter bursts[8]. News app users are practical by nature and seek information quickly and conveniently7.
  • Social media: Conversations are two-way and can potentially link the entire portfolio together (digital and print). Don’t ignore your social media footprint. Integrate this into your digital/mobile strategy to strengthen your presence.
  • Call to Action: When people use smartphones they are performing action-oriented searches, seeking local information with the intent to purchase8. Be sure to offer the latest deals, and allow users to easily search and mark favourites.
  • Less is more: A simple and user-friendly design, which allows for the integration of advertisements (rather than intrusive placement), will result in higher acceptance. Especially when presented with relevant content.

 

By incorporating the above features in an overarching mobile strategy, media firms can leverage mobile ad spend – which mushroomed this year. Integrating a strategic ad platform in mobile sites will narrow the gap and strengthen existing portfolios in an area where buyers are eagerly waiting for assistance!

 

For more information about how your organisation can generate mobile advertising revenue, refer to our ADONnews solution overview and contact us.

 

 


[1] Wilkinson, E., McMullan, D., Rosenberg, J., (2013). ‘The Smartphone Choices for Media Companies’, INMA, November, viewed 18 November 2013.

[2] Boxer, B., (2013). ‘The impact of mobile on publishers – more consumption, less revenue’, Forbes, viewed 18 November 2013, <http://www.forbes.com/sites/benjaminboxer/2013/11/14/the-impact-of-mobile-on-publishers-more-consumption-less-revenue/ >

[3] Sternberg, J., (2013). ‘How Publishers Hope To Close the Mobile Revenue’, Digiday, viewed 18 November 2013 <http://digiday.com/publishers/publishers-try-to-close-mobile-revenue-gap/ >

[4] Ma, W., (2013). ‘Mobile drives Facebook turnaround as advertisers flock in’, Adnews, viewed 18 November 2013 < http://www.adnews.com.au/adnews/mobile-drives-facebook-turnaround-as-advertisers-flock-in>

[5] McMillan, G., (2013). ‘If Facebook was a country, it’d be larger than China in three years’, Digitaltrends, viewed 18 November 2013 <http://www.digitaltrends.com/social-media/facebook-could-be-larger-than-china-in-three-years-time/#ixzz2l2ekq4wg >

[6] Baker, R., (2013). ‘Mobile ad spend to reach $40bn globally within five years’, Adnews, viewed 18 November 2013 <http://www.adnews.com.au/adnews/mobile-ad-spend-to-reach-40bn-globally-within-five-years>

[8] Seale, S., (2012). ‘Emerging Mobile Strategies for News Publishers’, INMA, June, viewed 18 November 2013.

 

Author: inx@admin

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