Mobile ad sales held back by short-sighted ad agencies


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A new report reveals why mobile advertising is not advancing as fast as mobile handset sales

Following on from the disappointing figures for mobile advertising revenue in 2010 that we reported yesterday we get a new white paper that explains some of the reasons behind the disappointing figures.

New research by mobile research agency mobileSQUARED for a white paper How to Simplify Mobile Advertising Planning and Buying, by ad platform StrikeAd has found that “buying trends are becoming more short term and clients more risk averse”, and hence “brands and agencies have been discouraged from investing big in emerging mediums such as mobile”.

At the same time, despite the complexities, brands are still asking agencies to add a mobile element to their campaigns, though not yet at the scale required for mobile advertising to reach its growth potential.

According to the research, in 2008 approximately 80% of all mobile advertising campaigns were created to promote other niche mobile-only content, whereas today some 50% of mobile advertising is now done by major lifestyle and consumer brands.

As part of the White Paper research, mobileSQUARED interviewed leading UK advertising agencies to understand the challenges they face when considering mobile campaigns and perceptions around mobile advertising.

“Interest in mobile is growing, and now is the time to unlock that potential. That means simplifying the process of planning and buying mobile campaigns. Our research highlights the need for an optimised platform to execute and measure mobile campaigns transparently, and maximise ROI. In doing so, this will overcome the reluctance of brands and agencies to give mobile the due consideration the medium deserves,” said Nick Lane, chief strategy analyst of mobileSQUARED.

“There is a huge demand for a single platform that simplifies the process of planning and executing campaigns in an often opaque mobile landscape. This research clearly shows that brands and agencies need the reassurance that a platform focused on mobile can provide to deliver measurable ROI in this emerging channel,” said Alex Rahaman, CEO and co-founder of StrikeAd.

Key findings from the White Paper

1. Agencies still not treating mobile as a significant advertising channel in its own right: Not all agencies have a dedicated mobile specialist, those who do, will not have the time to fully-develop a mobile campaign for multiple clients simultaneously.

2. Advertising buying trends in agencies have become more short-term and clients risk-averse: Reducing the likelihood to invest in mobile and other emerging platforms where the planning and buying process remains convoluted.

3. There is growing demand for 3rd party ad serving via a single platform: Network and device fragmentation, the complex planning and buying process of campaigns on mobile and the lack of transparent and measureable reporting are leading more agencies to seek streamlined solutions. Delivery and planning optimisation tools, like mobile demand-side platforms, will assure accuracy and confidence in mobile advertising.

4. Planners are confronted by limited data on mobile consumers: Agencies currently finding the task of collating data for reporting, manually intensive and the results not entirely accurate or transparent across ad networks. Dedicated mobile demand-side platforms have the ability to aggregate multiple data points across operating systems or networks.

5. Agencies need more reassurance that they are providing the best and most accurate targeting for their clients: Bad user experiences or content appearing inappropriate locations can only be addressed by demand-side third party ad serving and its ability to list a lack of inventory by target.

What do you think? Are agencies 100% to blame or are clients too risk-averse?
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