Why More Than 30 Percent Of Mobile Advertising Dollars Are Wasted

BurningMoney

According to a May 22 Advertising Age report, about 30 percent of desktop ads and an even higher percentage of mobile ads are a total waste of money.

That has nothing whatever to do with the quality, effectiveness or targeting of the ads themselves, digital analytics firm ComScore found recently.

Nor is it part of the usual rant about how clicks, likes and other forms of buzz don’t equal sales.

It’s because that proportion of the advertising is simply unviewable.

New medium, old problem

The problem of wasted media dollars goes back at least as far as the beginning of another newfangled technology – commercial broadcasting.

By their very nature, radio and television reach audiences that advertisers really don’t want to pay for.

Part of this is geographic, because by definition broadcasting covers a – wait for it – broad area. So if you’re a restaurant owner trying to drum up local lunch business in downtown Richmond, radio, for example, will help – but at the cost of buying useless (to you) listeners all the way from Charlottesville to Norfolk.

Before cable, it was even worse for television advertisers in multistate metro areas. A southern Maryland or northern Virginia advertiser couldn’t run broadcast television without buying the whole Washington, DC, metro. Same for Fairfield County, CT, and Bergen County, NJ, advertisers vis-avis metropolitan New York.

There was also demographic waste, because broadcasting reached a broad spectrum of consumers, many of whom were not qualified prospects for any given brand.

And there was waste resulting from the audience not paying attention, talking during commercial breaks or taking trips to the refrigerator of bathroom.

A different kind of waste

But in all those situations, at least the ads were there to be ignored or mistargeted.

Here, it’s a case of advertisers not reaching consumers they do want to pay for.

Ironically, in an advertising medium whose raison d’etre is its ability to target consumers geographically, demographically, psychographically and behaviorally, there’s a totally different problem: Owing to different technologies, notes Ad Age, “advertisers have been wasting money on mobile in a literal sense because a significant portion of the ads they’re paying for never properly display on devices. ”

From the earliest days of broadcasting, which admittedly involves less complex technology than computers, there were uniform technical standards. But it was only this year that the Interactive Advertising Bureau and the Mobile Marketing Association jointly released standards for mobile advertising.

So far, only one mobile advertising network – Apple’s iAd – is the only platform to be accredited by the Media Ratings Council as meeting those standards.

And they had to jump through all sorts of hoops to do it. As part of “an in-depth audit,” iAd

demonstrated accurate reporting of impressions, taps, tap-through-rate, visits, views, views-per-visit, average time spent, conversions, unique devices and unique device visits. Apple said its mobile ad network is more streamlined than others and that it only charges for ads that fully render on users’ screens.

Oh, and they had to pay “more than $100,000″ for the privilege. (Of course, the first added advertiser they get at their $100,000-a-year minumum will cover that expense.)

Google’s DoubleClick and server startup Medialets are two of a handful of networks following iAd’s example, while others, including network Millennial Media and server MoPub are weighing whether it’s worth the cost and bother.

A question of measurement

It’s the interactive technology that creates discrepancies between what mobile advertisers pay for and what they actually get.

With radio or television, once a commercial airs, it shows up on receivers, whether consumers want it or not. But with mobile advertising,

Serving a mobile ad involves a publisher sending an ad request to its ad server, that ad server sending a request to a third-party ad server, the third-party ad server making a request for creative and the creative server delivering the ad unit to the device. (If this sounds complicated, it is.) Couple all that with mobile-connectivity issues, and it’s easy to understand why a mobile ad might not render.

Still, publishers typically get paid regardless of whether the ad ever appears because ad servers usually use ‘server-side counting,’ meaning it’s counted as soon as an ad impression is requested.

Under the new MRC standards, mobile networks and serviers must use “client-side counting,” i.e., counting or charging for an impression only when the ad actually shows up on someone’s mobile device.

Grumbling in the ranks

But not everyone in the industry is thrilled with that approach. Millennial gives advertisers a choice of server-side or client-side counting. (No mention of whether there’s a premium for the latter.)

MoPub says it doesn’t work with publishers whose discrepancy rate – i.e., the difference between the number of impressions an advertiser pays for and the number that actually display on mobile devices – is less than 5 percent.

Which may be an elusive goal.

The Weather Co., which ComScore ranked fourteenth in unique mobile visitors in March, says it dropped its discrepancy rate from 20 percent to under 10 percent by switching to DoubleClick for Publishers Premium (there’s that extra-cost word again) last fall. Meanwhile, they’re offering advertisers more inventory than paid for, to compensate for all the times those ads never show up anywhere.

But while foregoing standardization, Weather Co. says they support it. “There’s no agreement how to measure it,” their VP-digital monetization told Ad Age, “and that’s just not fair to anybody.”

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