Mobile Web Advantage #5: Mobile Users Click on Ads

September 12th, 2011 by

In the Mobile Web Advantage series that we kicked off last month, we have been exploring the many benefits of moving your company’s services to the mobile web. In this post, we will focus on yet another of these benefits:  that mobile shoppers click on ads. According to Google’s recent Mobile Movement study, 42% of smartphone users who see a mobile ad click on it, and 21% of those surveyed cited a mobile ad as a reason to search for something on the mobile web.

Advertisers can’t ignore these trends. eMarketer predicts that by 2015, 46% of the US population will be using smartphones. In line with this trend, mobile ad spending is predicted to increase to more than $2.5 billion by 2014. With numbers like these, it is imperative for brands to focus on highly effective mobile advertising tactics so they do not lose out on potential customer interactions.

Mobile advertising campaigns typically achieve a CTR (click-through rate, defined as the number of times an ad is clicked divided by the number of times the ad is shown) of 0.67%, much higher than the standard 0.08% CTR for online banner campaigns. However, these numbers are just an average. Specific campaigns have successfully achieved much higher CTR’s. For example, in 2010, Ford ran a mobile campaign for its new Taurus model that users would click through idle screen mobile ads to get to the mobile website. This campaign achieved a 20% CTR! Although this number is higher than normal because all users had already opted in to receive advertising messages, we can still see the high level of engagement, and can easily expect the same or higher level of success if the brand were to run a similar campaign in 2011.

Furthermore, campaigns containing specific features such as location can yield significantly higher results. HotStop, a navigation vendor, claims that its mobile campaigns are 20X more effective than online ones. In addition, certain categories are inherently more successful with mobile advertising. For example, MediaMind says that entertainment campaigns received the highest click-through rate in their study (>1%). This is supported by Yahoo!’s recent study, which demonstrated that CTR’s on a mobile web movie campaign were 30X higher than their PC counterpart. Obviously, the sky is the limit with mobile advertising!

There are many reasons for this high level of engagement with mobile advertising. First, mobile ads are new. People aren’t as accustomed to seeing mobile ads as they are ads in the online world, so they have not yet developed banner blindness for mobile as they have online. In fact, 82% of users surveyed by Google say they notice mobile ads. Second, the screen is small so people tend to focus on one thing at a time. Third, activities performed on the phone are extremely relevant to the user’s current needs as the phone is where the user is. 72% of the users in the Google study said they searched to get information while they were on the go, and 95% of smartphone users have looked for local information.

However, there is more to the data than these general numbers. Breaking down mobile click behavior even further, we can see that there are gender differences: men click on mobile ads more often than women (2.73% vs. 1.65%). Click-through behavior also changes by time of day: mobile CTR’s tend to peak in the evening, likely due to the fact that during the day most folks are working at their PC’s and not searching on their mobile as often. Operating system is also relevant to the click-through rate. Not surprisingly, Apple’s iOS experiences the highest CTR results, closely followed by Android, at approximately 0.36% and 0.14%, respectively. In addition, by doing something simple like adding a phone number to ads, advertisers can increase their CTR by 6-8%. This data just goes to show that in order to plan a successful mobile campaign, as with any type of media, advertisers and brands need to consider their target audience to evaluate the content and delivery of the marketing message.

That marketing message needs to extend beyond the creative of a mobile banner ad or a promotional text message. Yet many advertisers forget to ask themselves an important question: “what happens after the user clicks on my ad?” Just like with online ads, mobile ads should link to their campaign’s landing page or a specific section within a site, only optimized for mobile. Seems like mobile optimization of campaign pages should be common marketing sense, right? Yet, according to the above mentioned Mobile Movement study by Google, 79% of large advertisers still don’t have a mobile optimized site. So yes, these advertisers might be riding the high CTRs wave… What they’re also getting are very high bounce rates, because mobile-savvy consumers expect more and won’t stick around on pages that don’t render well or require pinching-and-dragging.

To take advantage of the mobile advertising boom and leverage this captive and active advertising audience, you absolutely must embrace the mobile web.

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