Mobile Myths That Drive Publishers Onto The Ledge

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stevegoldbergThe Sell-Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Steve Goldberg, digital practice lead at EmpiricalMedia.

Mobile — and making sense of mobile — simply perplexes people. I have numerous even-tempered clients and colleagues who have been driven into a rage when tasked with creating presentations on mobile.

One reason is that the expectations for most on the sell side are not aligned with reality. A survey of trade articles makes you feel confident that marketers are cataclysmically underspending on mobile. Furthermore, you may also learn that most sellers make no mobile revenue at all or that everyone but you makes tons money on location-based ads.

Since all of this can’t all be true at the same time, let’s look at some popular mobile myths and bust ‘em up.

Myth No. 1: The ‘Meeker’ Myth 

I first met Mary Meeker when she was putting together her landmark Internet Advertising Report in 1996, and I can tell you she is one super-smart cookie who almost always gets it right. But her framing thesis on mobile, which worked so well for desktop advertising, is flawed and causes a lot of headaches and hair loss for sellers. Specifically, her assertion that the gap between time spent on mobile devices (12% of total) versus the ad spend (3% of total) implies a $20 billion opportunity in the US alone is misleading.

The problem with this assertion is that a tremendous amount of mobile time is spent on utility type applications versus professionally curated or created media. And I’m not talking about email or text messaging, which is contemplated in the data. I’m talking about apps from enterprises, such as Delta, Bank of America and Yelp, where there is little or no viable ad opportunity. The analogy would be if C-Span and PBS were the dominant, most-watched networks on television and still did not sell advertising. That would skew the numbers to a great degree.

Conclusion: Is the gap real? Yes. Is it (uncharacteristically) overstated in KPMG’s Internet Trends report? Yes. Is the overstatement a driver of more trade show presentations and angst than it should be? You bet.

Myth No. 2:  The ‘No Revenue’ Myth 

I’ve always wondered why so many companies are so insistent that they are completely failing in mobile when quite often they are not. It is unbelievably common for media companies to undercount mobile revenue by only counting mobile-only budgets. This complex sentence makes sense, I promise, but the practice does not.

I’ve known Russ Sapienza, whose team produces the IAB/PWC revenue report, since about the time I met Mary Meeker. He confirms that any ad that runs on a mobile device can be reliably counted as mobile revenue.

Facebook famously made more than half of its fourth quarter revenue last year on mobile advertising. It did not get there with mobile-only budgets.  Not even close. But the number of sellers who use the correct method to count mobile revenue is way lower than you might expect. A typical example is a client who is normally 80% sold out and who gets 40% of their traffic from mobile devices. To me, (and PWC) that says 32% of their revenue is mobile. But the CFO of the company insists the number is 2% because he only counts mobile-only insertion orders as mobile revenue.

Conclusion: Are mobile revenues too low for many? Yes. Are they frequently understated? Yes. Is this understatement causing a lot of angst in boardrooms? You bet.

Myth No. 3:  The ‘Location’ Myth

Location-triggered ads are really cool and offer an awesome signal for ad targeting. So, if you are not getting some of those mobile-only budgets, you might be kicking yourself. Or worse, you may be getting kicked by your boss or board.

One of the most frequent questions I hear from clients and prospects is how to get more of these high CPM budgets. But if you are a content creator, like the New York Post, Glamour or Viacom, chasing after mobile-only budgets with location triggers is probably an awful idea.

Location triggers, versus geo-fencing, require pretty frequent usage. The probability that a user is reading your newspaper while walking into a mall is too low to pursue that budget much less take that campaign.

Conclusion: Are location-triggered campaigns great? Yes. Does putting them in the loss column of your win-loss hurt? Yes. But should content creators take these deals out of their pipeline and spare themselves the agony?  You bet.

The overall takeaway for sellers: The reality is not as bad as it might appear. The best advice might be to keep calm and (try to) carry on (a bit less).

Follow Steve Goldberg (@stevegol) and AdExchanger (@adexchanger) on Twitter.

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