Mobile, Programmatic Media Draw Advertiser Budgets In Q4

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MobileHolArtWith mobile accounting for more than 39.7% of all online traffic this Thanksgiving weekend – a 34% increase from Black Friday 2012, according to IBM’s Digital Analytics Benchmark – marketer investment naturally followed that growth curve.

The mobile momentum continued Cyber Monday with IBM reporting that smartphones and tablets drove 30% of all online traffic in a single day, up 62% year-over year.

According to client data from Kenshoo, for holiday 2012, marketers put about 80% of their paid search budget toward desktops and laptops with 11.8% of budget going to smartphones and 8.7% to tablets.

Fast-forward to Thanksgiving 2013, which was marked by multi-device budget appropriation. Some 60.3% of paid search spend went to desktops and laptops while 21.2% went to smartphones and 18.5% went to tablets.

IBM’s Jay Henderson, global strategy director for the enterprise company’s Smarter Commerce initiative, expected this double-down of mobile marketing investments in paid search.

“We’re certainly seeing marketers increase the budget they’re spending on mobile and that’s really across the board from mobile websites to mobile ads,” he said. “They’re doing that in large part because consumers are adopting mobile phones” at an accelerated rate.

But not all mobile activity is equal. There were key differences between device traffic, sales and conversions, according to IBM’s Benchmark survey of 1,000 retailers. While smartphones accounted for close to 25% of online traffic to tablet devices’ 14.2%, tablets were better at driving sales, accounting for 14.4% of online sales compared to 7.2% driven by smartphones. Tablet conversion rates, or the percentage of sessions in which visitors completed an order, were higher, too, at 4.25% compared to the 1.4% conversion rate,  on smartphones.

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According to Jeremy Hull, director of paid search at digital performance marketing agency iProspect, this year is especially interesting because marketers are constrained by the 27 days between Thanksgiving and Christmas (the shortest shopping season in 10-plus years.)

Additionally, consumer behaviors have changed such that Black Friday and Cyber Monday, which used to be a signal for businesses to drop their prices, now are “bleeding into the days around them,” according to Hull. Today’s marketing campaigns must be more nuanced to account for cross-channel behaviors. “The combination of the shorter shopping season and customers interacting with a lot more channels means that they’re not just behaving as predictably in previous times,” Hull said.

According to a recent eMarketer report, digital ad spending in the retail vertical is expected to continue its upward growth pattern, hitting an estimated $9.5 billion by the end of the year. A majority of that spend is attributed to marketing to holiday shoppers with an estimated 23.5% of ecommerce sales expected to occur in the months of November and December.

Echoing Kenshoo’s data was eMarketer’s prediction that key retail marketing investments will be in mobile advertising, “particularly search,” as well as mobile display and targeting through platforms like Facebook and Twitter.

With increased mobile penetration, mobile ad networks are ramping up exchange-based buying capabilities, which will open up more mobile inventory to marketers. Millennial Media’s team-up with AppNexus to form mobile ad exchange Millennial Media Exchange, as well as Twitter’s acquisition of mobile ad exchange MoPub, are just a few examples.

Mobile RTB will only heat up and clear differences between types of mobile device are emerging. Accordant Media, for instance, found tablet ads outperformed handheld ads to the tune of six times in reaching cost-per-acquisition goals.

Although iProspect’s agency heritage is in search, increasingly, mobile, social and programmatic display are viable areas of adoption as well, evidence of marketers’ shifting budgets. The agency has seen “significant growth in participation and interest” from retail clients with regard to programmatic media buying, Hull said.

“Quality is becoming more important than quantity and it’s not [sticking to] behavioral buying or lookalike targeting,” Hull said. Retailers “who are really performance-based [are going programmatic] because it’s more quantifiable and controllable than just the ‘get your ad in front of a bunch of eyeballs.’”

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