The definition of native advertising remains somewhat murky (the IAB has set up a task force to tackle this problem), but many forecasts see digital ad sponsorships as a growing area, depending of course, on their definition.
Meanwhile, other results from the Advertiser Perceptions study suggest that 60% share of respondents’ digital ad budgets will be spent on direct buying in the coming 6 months, with the remainder on programmatic buying. Interestingly, during that time frame, respondents expect to allocate 61% of their mobile advertising budgets to mobile phones, with only 39% going to tablets. Based purely on an analysis of consumers’ online time spent with these devices, phones may actually be underweighted, although tablet users may indeed present a more attractive demographic than smartphone users.
Real-time bidding is a kind of automated or programmatic buying of advertising placements.
It is to digital advertising what high-frequency trading is to Wall Street. It involves computerized, algorithm-driven trading that allows for quick buying of ad impressions according to pre-set parameters. Recently, Twitter is the latest tech company to enter the RTB race with this month’s acquisition of MoPub, an ad exchange with a real-time bidding platform.
On the desktop, programmatic or automated buying of display ads has already made huge inroads. Its advocates say that it has led to a more transparent and efficient digital ad market. But it is in mobile where programmatic buying may make the most difference. That’s because smartphones are advertising platforms that we carry in our pockets, and with RTB that means marketers can reach us in real-time, and target potential customers according to location and context.
Bot traffic continues to be a global problem, says Solve Media in its latest Bot Traffic Market Advisory update. In Q2, activity deemed “suspicious” grew to 49% of all traffic for the web advertising ecosystem, up from 43% in Q1, 40% in Q4 2012 and 26% in Q3. Confirmed bot traffic was in the range of 24-29%, fairly consistent with prior quarters, but still up significantly from 10% in Q3 2012. Suspicious mobile traffic, while not quite on the same level as the web, is also on the rise.
During Q2, suspicious activity grew from 29% to 35% for mobile advertising, with confirmed bot traffic in the 11-14% range.
The US’ level of suspicious web activity was slightly below the global average, at 42%, with suspicious mobile activity also below-average at 22%.
The top 3 countries for suspicious web activity were: China (92%); Venezuela (80%); and the Ukraine (77%). For mobile traffic, the countries with the highest share of suspicious activity were: Singapore (86%); Macau (82%); and Qatar (81%).
Solve Media also warns of a “new threat targeting the video ad marketplace.” Recently, Vindico suggested that 30-40% of video ad impressions could be fraudulent.
Overall, Solve Media estimates that current levels of bot traffic put the digital advertising industry on pace to waste up to $9.5 billion this year advertising to bots.
Pandora reported total mobile revenue growth of 92% year-over-year, according to the company’s earnings released last week.
That puts Pandora’s mobile revenue at $116 million, almost 72% of total revenue, up significantly from a 65% share last quarter.
More than ever, Pandora is a mobile-first company, and its efforts to build a media business around mobile advertising make it a bellwether for the industry.
In the recent past, Pandora seemed to be struggling to monetize mobile effectively.
The company even saw its RPM rate, the amount of revenue it could command for a thousand advertisements, decline in recent quarters.
But this past quarter it accomplished a 180-degree performance turnaround.
Pandora’s RPM rate jumped 52% compared to the same quarter last year, and 39% compared to the prior quarter.
Pandora executives have attributed the impressive mobile numbers to app improvements and bulked-up efforts to sell locally targeted ads.
Pandora has improved its ad revenue picture enough that it now feels confident lifting its 40-hour-per-month listening cap for free mobile users, despite the increased content licensing costs that will bring.
The end of the 40-hour cap could also be seen as a preemptive defensive tactic against the expected September launch of Apple’s iTunes radio streaming service.
Wearables, connected car, mobile wallet, mobile health, mobile advertising, distance learning, indoor location, everything as a service, connected TV
The Vast Majority Of Apps Are Free (Flurry)
And it keeps rising: 90% of apps currently in use are free, up from 84% last year. The $0.99 price point has been especially squeezed, falling to just 6% of apps in use from 15% in 2011. Android users are the least willing to pay for apps. The average app price on Android is $0.06, compared to $0.19 on iOS. The findings reinforce that that “freemium” will continue to be the dominant business model in apps for the foreseeable future. It also opens the door for more mobile advertising, if consumers aren’t willing to pay for apps. Read >
Mobile phones are taking up an ever greater share of consumer attention, but you wouldn’t know it looking at advertising expenditures.
According to a new report from IAB and IHS, significant portions of the world have yet to crack even $1 in mobile ad spending per mobile subscriber. Only North America has passed the $5 mark, at $9.20 of mobile ad spending per subscriber in 2012.
To be fair, mobile advertising is really only relevant on smartphones. Spending per subscriber will naturally be low in underpenetrated regions where many subscriptions are tied to feature phones with limited Internet access, and virtually no apps.
Smartphone owners, taken separately, will drive much higher per-capita ad spend rates. If we look at the U.S., for example, mobile ad spend was $3.4 billion in 2012 and there were 125.9 million smartphone subscribers at year-end, giving us spending of $27 per smartphone subscriber.
For comparison, T.V. advertising spend was $65 billion last year by one measure (other figures put it north of $70 billion), which translates to more than $200 in ad spending for every citizen of the U.S.
Of course, in terms of time-spend, TV still beats the smartphone handily, so some of that difference is simply a measure of where consumers place more of their attention. Mobile accounts for a 12% share of consumer media consumption in the U.S., while the TV takes a 42% share.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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