E marketer mobile_display_ad_types-move_over_banner_ads_youve_got_company

Copyright ©2013 eMarketer, Inc. All rights reserved.
The Expanding Menu of Mobile Display Ads 2
Popularity, Availability and Irresistibility 5
Factors Influencing Mobile Advertising Costs 8
Conclusions 11
eMarketer Interviews 12
Related eMarketer Reports 14
Related Links 14
February 2013
Executive Summary: If “mobile advertising sucks,” it has less to do with the limitations of mobile ad formats than
it did when the late Apple co-founder Steve Jobs used those words in 2010.
151176
At that time, advertisers’ options were largely restricted to
static banners that in Jobs’s words failed to “engage and deliver
emotion.” While the static banner is still widely available and
used, advertisers looking to engage mobile consumers on a
more emotional level have a menu of formats to choose from,
including an assortment of rich media ads and a growing
number of video formats. Furthermore, Facebook and Twitter
have reinterpreted the static ad concept in ways that weave
brand messages organically into the mobile content experience.
The larger and more diversified supply of mobile ad formats
means greater opportunities for advertisers to deliver engaging
experiences. And bargains abound as publishers and app
developers rely heavily on third-party services to sell mobile
inventory. However, rich media and video ad formats are not
going cheap, especially when targeted to specific audiences.
Key Questions
■■ What mobile ad formats are available in 2013?
■■ Which ad formats are in high demand?
■■ What factors are influencing mobile advertising costs?
Most Common Display Ad Format Served to US
Mobile Phones, H1 2012
Source: Mobile Marketing Association (MMA), 2013
151176 www.eMarketer.com
Feature phone Smartphone
168x 28
320x50
Cathy Boyle
cboyle@emarketer.com
Contributors
Tobi Elkin, Chris Keating, Martin Utreras
Mobile Display Ad Types:
Move Over Banner Ads,You’ve
Got Company

Mobile Display Ad Types: Move Over Banner Ads, You’ve Got Company Copyright ©2013 eMarketer, Inc. All rights reserved. 2
The Expanding Menu of Mobile
Display Ads
eMarketer estimates US advertisers will spend
$2.2 billion on mobile display advertising in 2013
and diversify investments across a wider range of
ad formats. Unlike three years ago, when there was
little more than the static banner to choose from,
advertisers looking to engage mobile users now have
an array of display ad options at their disposal.
While subsets such as “banners, rich media and video” play
an important role in understanding the composition of the
mobile display ad category, such names mask the individual
ad formats available to brand advertisers. Just as a diner
would be ill-equipped to choose a main course to satisfy his
hunger and budget without understanding the options within
the “meat, fish and pasta” categories, advertisers need similar
transparency to achieve their campaign goals. To shed light
on the types of mobile ads available, it’s best to work from the
bottom up, starting with a set of common ad units served to
mobile devices.
Common Ad Units
After analyzing 140 billion in-app and mobile web impressions
from Q2 2011, the Mobile Marketing Association (MMA), in
partnership with interactive media verification firm ImServices
Group, found six ad units were most commonly used by
advertisers deploying campaigns to smartphones and feature
phones. After a period of public comment, the industry
organization recommended these six units, along with a
popular mobile audio ad unit, become the global standards for
smartphone and feature phone display ads.
Mobile Ad Dimensions Used by Mobile Ad Networks
and Publishers, 2012
Display ad units
Dimensions
120x20
168x28
216x36
300x250
300x50
320x50
Audio ad units (if supported)
Length
15 seconds
Type
Feature phone
Feature phone
Feature phone
Smartphone
Smartphone
Smartphone
Type
Smartphone
Source: Mobile Marketing Association, "Universal Mobile Ad Package
(UMAP) V2.0," Aug 2012
151178
To gauge the adoption of these recommended units, the MMA
and ImServices analyzed 93 billion mobile ad impressions
served in the first half of 2012 across a selection of mobile
ad networks. The results showed that nearly 90% of ad
impressions served to feature phones used the 168 x 28 pixel
ad unit, and roughly 80% of ads served to smartphones used
the 320 x 50 pixel ad unit.
Most Common Display Ad Format Served to US
Mobile Phones, H1 2012
Feature phone Smartphone
168x 28
320x50
151176
To benchmark the MMA’s findings, eMarketer conducted a series
of interviews with an assortment of leading publishers, mobile
ad networks, ad exchanges, brands and advertising agencies.
Among the companies consulted, adoption of the MMA’s six
standard ad units was high.As an example, mobile ad network
Jumptap reported that 75% of the inventory it manages uses nine
ad units. Five of those are the standard units issued by the MMA
for smartphone and feature phone campaigns, and three of the
four nonstandard units are sized for tablets.
Given that companies are quickly adjusting content and
advertising to accommodate the growing use of tablet devices,
the presence of larger, nonstandard units was common among
those interviewed for this report.The MMA has not yet officially
published tablet standards, but its analysis of the 2012 impression
data revealed that the two units most commonly served to iPads
were desktop mainstays, the medium rectangle (300 x 250 pixel)
and the leaderboard (728 x 90 pixel).Together, these ad units
were responsible for nearly all of the iPad impressions in the
sample studied by the MMA and ImServices.

Most Common Display Ad Formats Served to US
iPads, H1 2012
728x90
300x
250
151177
The large share of desktop units among tablet impressions raises
the question of to what degree are advertisers simply serving
desktop ads to the smaller screens. Research could not be
found to answer this question definitively, though interviews with
agency experts suggest it is happening with some regularity.
“We’ve worked with clients that like to replicate standard
online creative meant for the web because it’s seamless.
They’ve already approved their standard ad and they don’t
have to spend money on additional creative formats,” said
Michael Baliber, senior vice president and director of media
strategy for direct response agency ID Media.
Ravi Pahilajani, associate media director at digital agency
Razorfish, described the situation similarly: “We’re seeing a
significant amount of rich media and video coming through on
the tablet side of the house, but don’t get me wrong, we still
have static 728 x 90 pixel and 300 x 250 pixel banners because
they can be easily repurposed.”
The ad unit, however, is merely the frame through which
advertisers deliver their messages. The power to differentiate
mobile advertising from desktop, and in turn increase brand
engagement, lies in how advertisers tailor the growing set of
mobile ad formats at their disposal to the mobile medium.
Common Ad Formats
The menu of mobile ad formats—or ad styles—is evolving
in much the same way as desktop display. “You can find any
type of static or animated banner, rich media, video and a lot
of different types of social ads that have extensions across
mobile,” said Wade Rifkin, vice president and media director at
digital agency Digitas. Additionally, there is a growing selection
of custom formats that deliver share of voice on par with
desktop sponsorship formats.
What differentiates mobile ad formats from those on any other
medium is their ability to leverage the unique capabilities of the
devices on which they are served. For example, sensors can
provide insight into the location and context in which consumers
are using their smartphone or tablet, enabling a brand to increase
the relevancy of its message in response.And touchscreen,
camera, text messaging and other phone features offer multiple
ways for a brand to engage the consumer.
Nomenclature used for mobile ad formats varies widely from
publisher to publisher and between mobile ad networks and
ad exchanges, which can make it difficult for an advertiser to
differentiate one seller’s options from another’s. The following
list attempts to describe in basic terminology the variety of
mobile display format options available.
Banners and Static Formats
Simplistic in design, the following formats typically serve as a
quick link to a secondary destination (app store, website, map,
etc.) or trigger actions such as a phone call, text message or
app download.
■■ Traditional Banners: These ad formats allow for a small
amount of text, basic animation (typically animated GIFs) or
static images.
■■ Full-Screen Interstitial: This format is often served on
the launch of an app before the content is rendered, or as
a user navigates between sections of content or transitions
from one level of a game to another. Like the traditional
banner, animation capabilities are limited.
■■ In-Stream Mobile Social Media: Currently offered primarily
by Facebook and Twitter, these ads are designed to match
the format and style of content in a user’s social newsfeed.
Facebook’s ad formats include Mobile App-Install Ads as
well as mobile versions of the Sponsored Stories, Promoted
Posts and Facebook Offers found in Facebook’s desktop
environment.Twitter’s mobile ad offerings include Promoted
Tweets in the mobile timeline and search, as well as Promoted
Accounts and Promoted Trends targeted to mobile devices.
Interactive Rich Media
■■ Rich Media Banner: This banner can include animation
and visual transitions that are technologically more
advanced (using HTML5 or JavaScript, for example)
than the animated GIF used for standard banners. For
example, swipe-able images and click-to-play video can be
embedded in the banner, along with multiple buttons that
can enable social sharing, emailing, texting and so forth.
■■ Mobile Audio: Mobile audio ad formats offered by companies
such as Pandora play during transitions in audio content just as
a radio advertisement plays between songs.The recommended
length for the mobile audio ad is 15 seconds.Note:Mobile audio
ads can be coupled with a traditional banner or rich media ad
format served simultaneously to a device’s screen.
The Expanding Menu of Mobile Display Ads

■■ Expandable Rich Banner: Served in the collapsed form,
these formats can resemble traditional or rich media banners.
However, when tapped, the ad can expand to the full screen
without leaving the app or mobile site. In expanded mode, the
ad can take on the feeling of a microsite and can leverage
multiple rich media capabilities offered by the publisher or ad
server.These can include but are not limited to audio, video,
game functionality, quizzes/polls, image galleries, 360° view,
an embedded web browser, social sharing and actions that
make use of device features such as the camera, gyroscope,
accelerometer, GPS, etc.
■■ Rich Interstitial: These ads are displayed upon launch of an
app or website, or served between content pages or game
levels.This format can occupy the full screen or be served
into one of the common ad units mentioned above. Like
the expandable banner, this format can be built to feel like a
microsite and include a variety of rich media capabilities.
The following rich media ad formats are two of the five formats
declared Mobile Rising Stars by the Interactive Advertising Bureau
(IAB) in February 2012 as part of its larger Rising Stars initiative,
which seeks to facilitate brand advertising on digital platforms.
According to the IAB, these two ad formats were the most widely
used of the Rising Star formats.
■■ Adhesion Expandable Banner: This ad format is similar
to the standard expandable banner except it “adheres” to
the portion of the screen on which it is served. Therefore, it
remains visible as the user swipes through content. When
tapped, the format expands to offer the same capabilities as
a standard expandable banner.
■■ Full-Page Flex: The unique aspect of this ad format is that
the width, height and orientation of the ad automatically
adjust to the dimensions of the device on which it is served.
This format can be an expandable unit or an interstitial, and
it can leverage multiple rich media capabilities.
Video
Mobile video ads vary in length but are commonly less than
15 seconds. These formats can include interactive features to
trigger actions such as downloading an app, social sharing,
emailing, etc. Such calls to action can appear on the video
itself using a transparent overlay, can sit beneath the video or
appear on a dynamic end card as the video resolves.
■■ Tap-to-Watch Video: This video format is typically initiated
using a static display format that includes a “watch video”
button. When tapped, the video player takes over the screen
and, in its most effective form, does not remove the user
from the app or mobile website.
■■ In-Banner Video: In this case, the video format is served
within the display ad unit and plays automatically. There is
also an expandable version of this ad format that enables
the user to enlarge the video and collapse it back down to
the original size upon completion.
■■ Interstitial Video:As with other interstitial ads,this format is
served upon launch of an app or mobile site or during content
transitions.The video ad typically plays automatically upon launch.
■■ In-Stream Video: Perhaps the most natural environment
for mobile video ads, this format is paired with premium
video content and can be served as a pre-roll, mid-roll or
post-roll ad. Pre-roll and mid-roll video is the most common
placement for mobile video ads.
Sponsorships
Defined by the IAB as “custom content and/or experiences
created for an advertiser,” sponsorships are not classified as
a unique subset of mobile display advertising, as they are in
the desktop world. However, the lack of recognition doesn’t
mean mobile advertising is devoid of such advertising. Indeed,
the approach has ported to the smaller screen and eMarketer
accounts for mobile sponsorships when projecting spending
levels for the mobile display category.
The goal of mobile sponsorships is the same as on the
desktop: to integrate a brand or product seamlessly so the
brand message feels native to the content experience. In turn,
advertisers and publishers may agree on a custom approach.
For example, a game developer may allow a product to
become an integral element of a game for a given period of
time. Alternatively, an advertiser may weave together one
or more of the ad formats mentioned above to command a
single share of voice within an app or mobile site.
Auto manufacturer Chevrolet took the latter approach when
it partnered with mobile media company Zumobi and Source
Interlink Media to run The Chevrolet Six-Part Technology Series in
the Motor Trend magazine’s iPhone and Android apps between
July and October 2012.The six-part campaign served a rich media
expandable ad to the Motor Trend apps every three to four weeks
to announce the release of new “content” in the series.“When
the user tapped on the ad unit, it took them into the special
Motor Trend section that was all Chevy content.There were long-
form articles to scroll through and videos to watch.And, if you
wanted to read it later, you could save the [content] series to the
home screen of your phone,” said John SanGiovanni, Zumobi’s
co-founder and vice president of product design.
A point of confusion regarding sponsorships in the mobile
channel is whether a content-rich branded app created by an
advertiser to launch a product or to raise brand awareness
should be considered advertising or a marketing tactic. Take
the Chevrolet example: If the automaker had developed
an app of its own to publish the Six-Part Technology Series
instead of buying ad inventory from Motor Trend, the
app would be considered a mobile marketing tactic, not
advertising. The distinction is based on there being a media
buy associated with advertising but not with marketing tactics.
The Expanding Menu of Mobile Display Ads

Popularity, Availability and
Irresistibility
The popularity of one mobile ad format over another
has less to do with available inventory than with
ease of use, scalability and the targeting capabilities
associated with the format.
Facebook’s and Twitter’s mobile ad formats score high marks
in all three areas and are growing increasingly popular with
both performance and brand advertisers as a result. Big-box
retailer Wal-Mart, for example, deployed 50 million mobile ads
through Facebook over Thanksgiving weekend to prime the
2012 holiday shopping season. And to support the launch of
the newly redesigned Civic, automaker Honda targeted mobile
users with ads on both social networks.
“During the Los Angeles auto show in November 2012, we
used mobile Promoted Tweets and a hashtag that drove traffic
to photos and video content. And throughout the launch, we
used promoted posts on Facebook and saw our web traffic
grow increasingly mobile,” said John Watts, Honda’s senior
manager of digital marketing.
In the spectrum of mobile ad formats, Facebook and Twitter
ads stand out because their organic nature helps brands
become a part of the content experience.
“Our ads are tweets first and ads second. The only difference
between an organic tweet and a Promoted Tweet is the
Promoted symbol underneath it,” said Will Stickney, Twitter’s
communications manager.
It’s doubtful consumers put Promoted Tweets and tweets
from friends on equal ground, but just like with user-generated
tweets, “folks are retweeting and favoring Promoted Tweets.
In fact, last year, the most retweeted tweet was a Promoted
Tweet by Wendy’s,” Stickney said.
For advertisers already leveraging Facebook’s or Twitter’s desktop
ad programs, extending campaigns to mobile is seamless.
“Because the buying systems are natural extensions of the
desktop ad systems, it’s easy to allocate money [to mobile] as
part of the overall program,” said Rory O’Flaherty, group media
director for digital agency R/GA.This is particularly attractive
because it eliminates the need to navigate the mobile advertising
ecosystem and invest in additional creative assets.
“On Facebook, the promoted post is a device-agnostic piece of
content that is reformatted by Facebook to run cross-platform,
whether it’s an Android tablet or smartphone, iOS tablet or
smartphone, or desktop,” said Gokul Rajaram, Facebook’s
product director for ads.
Ads designed to resemble content may be less interruptive
than a full-screen interstitial ad that appears between levels of
a game or an instant-play video ad that runs before a popular
YouTube video. However, as mobile spending increases and the
flow of Facebook Sponsored Stories and Twitter Promoted Tweets
targeted to mobile users goes up, there’s a risk that such ads will
be as easy to ignore as an overzealous friend’s minute-by-minute
status updates.With pressures on both companies to increase ad
revenue, the challenge ahead will be to diversify the variety of ad
formats to keep both brands and users engaged.
As newcomers, Facebook and Twitter are in the spotlight, and
because of their substantial reach, they are garnering a large
share of mobile ad dollars. From the advertiser’s perspective,
however, their arrival has had little impact on demand for the
other mobile display formats.
“Facebook,Twitter and the social media options are good to have,
but they’re not overtaking the other kinds of mobile media.They
go hand in hand with the display strategy for clients and are an
add-on to the mobile component,” said Camilo Lizarralde, group
planning director at digital agency neo@Ogilvy.
In general, advertisers have been clamoring for a selection
of better formats. Now that the format list has grown beyond
the banner, and as brand advertisers test the mobile waters
in larger volumes, mobile video ad formats are in demand.
“Everyone is asking for video. It’s the big, shiny object that
everyone wants this year,” said Alice McKown, associate
publisher of men’s lifestyle magazine GQ.
The demand for mobile video ads is not surprising given that 75%
of tablet users surveyed by Keynote Competitive Research in
the first half of 2012 said they watched videos on those devices.
Likewise, eMarketer estimates 51% of US smartphone users in
2013 will watch videos on their phones at least once a month.
Perhaps most encouraging for advertisers is mobile users’
preference for ad-supported streaming video content. Of the
1,500 internet users surveyed by Frank N. Magid Associates in
November 2012 for video ad network YuMe, nearly 60% said they
would rather see 15- to 30-second commercials streamed with
free video content on tablets and smartphones than subscribe or
pay a fee for commercial-free videos.

% of respondents
US Internet Users Who Want Access to Streaming
Content that Is Ad-Supported vs. with a Subscription,
by Device, Nov 2012
Tablet
59% 22% 19%
Mobile device such as smartphone or iPod touch
58% 22% 19%
Laptop or computer
58% 24% 19%
Streaming on a TV screen connected to the internet
54% 27% 18%
Free, with 15- to 30-second commercials integrated into
the content
Monthly subscription fee, without commercials integrated
into the content
Fee for each video, program or movie I watch, without
commercials integrated into the content
Note: ages 12+; numbers may not add up to 100% due to rounding
Source:YuMe, "Emerging Growth Opportunities for Connected TV and
Advertisers" in conjunction with Frank N. Magid Associates, Dec 18, 2012
149195
Advertisers looking specifically for in-stream video last year
found inventory was limited. “The demand/supply balance is
the most constrained for in-stream video, and last year there
was a lot more demand than we were able to fill. The number
of in-stream ad opportunities per month is in the half-a-billion
range, while the other mobile video formats are available in
much, much larger numbers,” said Ujjal Kohli, CEO of mobile
video ad network Rhythm NewMedia.
Alex Linde, vice president for mobile and digital apps at The
Weather Company (formerly The Weather Channel) agreed
that more in-stream video inventory is needed, and noted that
his company is responding. “Video is the thing that marketers
are asking for, but we didn’t actually make video available
until September 2012,” he said. “Our application redesign will
feature video much more prominently, so we expect to offer a
lot more video ads [going forward].”
An eMarketer report scheduled for publication in
the second quarter of 2013 will offer more detailed
information on mobile video ad usage and effectiveness.
Indeed, in-stream video may be the most sought-after method
for serving video ads to tablets and smartphones, but as Digitas’
Rifkin pointed out,“Rich media enables the overwhelming
majority of display media to be video-enabled, and clients are
excited to take advantage of it from a purely creative standpoint.”
An expandable rich media banner ad that opens to what
feels like an embedded website with a video player and
interactive features is becoming an increasingly popular
way for marketers to tell their story. While Apple led the
way with the development of rich media expandables, and
iAds were once the only option for delivering immersive
rich media experiences, mobile rich media formats are now
widely available.
“We are doing more and more rich media ads, but we think it’s
still an untapped market.There’s a huge opportunity [for growth]
with rich media as screen sizes have gotten bigger and phones
have gotten more robust,” said Brian Colbert, vice president of
mobile advertising sales for Pandora.“The functionality is just
so incredible now.Whether you’re leveraging GPS functionality
in maps or calendar functionality, you can do so much with the
phones from a rich media perspective.”
Brand advertisers are enthusiastic as well. When asked,
“Which of the following mobile marketing elements are you
using (or are you planning to use) to reach customers,” 75% of
US client-side marketers who responded to an October 2012
survey conducted by the Association of National Advertisers
(ANA) and MediaVest said they were interested in mobile rich
media formats. Of that group, slightly more than half were
already investing in rich media formats, and the other 20%
planned to do so in the coming year.
Still Bewitched by Banners
Despite the increased availability and enthusiasm for more
immersive and interactive ad formats, those consulted for
this report agreed that static banners continue to dominate
the mobile advertising landscape. Krishna Subramanian,
chief marketing officer of mobile marketing firm Velti,
estimated 60% of the market is comprised of direct-response
campaigns using banners with static images or animated
GIFs. AOL reported an even higher share: “The bulk of our
business—80% and above—is still banners,” said Mandar
Shinde, AOL’s senior director for mobile monetization.
The direct-response focus among mobile advertisers is one
likely factor contributing to the continued popularity of static
ad formats. An August 2012 survey commissioned by Velti and
conducted by Forrester Research found marketers’ objectives
for their mobile advertising and marketing campaigns skewed
toward performance over branding, regardless of their
experience level with the mobile channel. The research firm
polled US-based B2C marketers and agencies representing
the retail, automotive, consumer packaged goods, travel
and financial services sectors and found 90% of the 139
respondents expected to acquire new customers through
their mobile efforts. A sizable, albeit smaller, number (83%)
aimed to raise brand awareness through mobile advertising.
Popularity, Availability and Irresistibility

% of respondents
Mobile Advertising/Marketing Objectives Pursued
by US Mobile Marketers, by Mobile Experience Level,
Aug 2012
Less
experienced
Acquire new customers 82%
Increase brand awareness 75%
Increase customer loyalty and retention 74%
Increase customer satisfaction 56%
Improve customer service 52%
Offer convenience to customers 61%
Extend customer engagement through
anytime/anywhere access
51%
Generate leads 32%
Build mobile community through text
calls to action, sweepstakes, contests,
coupons, etc.
Experienced*
90%
83%
83%
76%
71%
63%
56%
37%
22% 29%
Note: n=139; *have had a mobile marketing strategy for at least 2 years
Source: Velti, "Present & Future of Mobile Marketing" conducted by
Forrester Consulting, Nov 20, 2012
147803
For advertisers focused on immediate conversions, the static
banner format provides an affordable and scalable means of
linking mobile users to an app store or a web storefront, or to
trigger a phone call or text message, all of which can generate
leads or sales. “The biggest volume of impressions comes
from direct response app downloads, so it’s not surprising that
a banner is the most-used ad format,” said Jason Young, CEO
of Crisp Media, a firm that specializes in rich media ad format
development and serving.
Yet the popularity of the banner is not a reflection of available
inventory, according to the industry experts consulted
by eMarketer.
“There’s a misunderstanding in the marketplace that the bulk
of [mobile] inventory is banners. That’s not true. What is true
is that the standard banner is the prevalent marketing tool,
and for performance advertisers who are trying to drive app
downloads, it may be the best marketing tool,” said Marcus
Startzel, general manager for North America at mobile ad
network Millennial Media.
The Weather Company’s Linde agreed but sees other factors
at play. “We, like many publishers, are responding to requests
for banners, so 90% of what we sell are static banners. We
offer [rich media formats], it’s just that agencies do not often
have the time or the budget to buy [them]. Either that or they
are stuck with a static banner that they’ve been given [by the
client] and have to run with it,” said Linde.
From the buyer’s perspective, agencies point to ease of use,
cost, targeting ability and the evolution of a campaign cycle as
reasons why banners are still so widely used. “The standard
static unit resonates because it’s commonly accepted and it’s
the fastest way to get your message out there across many
different platforms,” said Razorfish’s Pahilajani.
“Standard banners have more premier targeting to identify
niche audiences, and they can also be sold on performance
pricing models, which make them a bit more palatable for
some of the direct-response advertisers,” said Digitas’ Rifkin.
“If it’s the first test-and-learn [mobile advertising] opportunity,
we’re most likely going to test the lowest cost [format]
possible. We’ll use standard banners just to get a sense of
how qualified that mobile consumer is as opposed to the web
consumer, and utilize the metrics to define the next steps for
engaging with rich media or video,” said ID Media’s Baliber.
As the “known quantity,” banners have a leg up on newer mobile
ad formats for the same reasons banners are still a popular
desktop format: proven utility, cost-effectiveness and advertiser
inertia. However, as more big brands turn their attention to mobile
in 2013 and their dollars flow into mobile display advertising,
eMarketer expects total spending on mobile social media ads,
mobile video and mobile rich media ad formats will surpass the
total amount spent on mobile banners.
Popularity, Availability and Irresistibility

Factors Influencing Mobile
Advertising Costs
The tension between supply and demand and the
methods used to buy and sell inventory remain the
primary forces influencing the cost of advertising
across mobile devices. Still, the introduction of new
formats, targeting capabilities and industry standards
hold significant sway over campaign costs as well.
Last year, according to eMarketer estimates, roughly 116 million
consumers used smartphones and 79 million used tablets in
the US. Chitika data showed mobile devices generated 27% of
website traffic in September 2012.And as of January 2013, more
than 800,000 apps were available in Apple’s App Store and in
excess of 700,000 were available for Android devices through
Google Play. Meanwhile, 90% of publishers surveyed by Alliance
for Audited Media (AAM) in October 2012 said their content was
formatted for mobile devices, and the remaining 10% said they
planned to implement mobile content in the coming year.
These are significant milestones and they have led to a
surplus of display ad opportunities for advertisers to invest in.
However, the vast majority of advertisers have been slow to
follow the migration of eyeballs to mobile devices. eMarketer
estimates that time spent with mobile devices in 2012
outweighed the level of ad spending in the channel by nearly a
factor of five (11.7% vs. 2.4%).
% of total
Share of Average Time Spent per Day with Select
Media by US Adults vs. US Ad Spending Share, 2012
TV*
Online
Radio
Mobile (nonvoice)
Print
—Newspapers
—Magazines
Time spent
share
39.8%
24.8%
13.2%
11.7%
5.4%**
3.1%
2.3%
Ad spending
share
38.9%
20.9%
9.3%
1.6%
20.7%
11.5%
9.2%
Note: time spent with each medium includes all time spent with that
medium, regardless of multitasking; for example, 1 hour of multitasking on
a PC while watching TV is counted as 1 hour for TV and 1 hour for online;
*TV time spent includes live, DVR and other prerecorded video such as
video downloaded from the internet but saved locally; TV ad spending
includes broadcast TV (network, syndication and spot) and cable TV;
**ofﬂine reading only
Source: eMarketer, Sep & Oct 2012
146107
For insight into why spending hasn’t flowed more quickly into
mobile, see eMarketer’s October 2012 report, “Mobile Display
Advertising:Aspirations, Revelations and Frustrations.”
Means Used to Buy and Sell Inventory
It’s important to note the use of the phrase “ad opportunities”
in the preceding paragraph, because one of the key factors
influencing the cost of mobile display ads is a publisher’s or app
developer’s ability to sell its inventory directly to advertisers.
Indeed, large desktop publishers with established sales teams are
tapping existing resources to sell ads on their mobile properties
at premium prices. However, with mobile ad revenues still a
fraction of those generated by desktop, the larger screen takes
priority, often leaving publishers to rely on third-party mobile ad
networks and exchanges to keep fill rates high.The downside
for the publisher is the risk of lower costs per impression on
inventory that could, if sold directly, garner much higher rates.
Companies native to the mobile ecosystem—game developers,
for example—are even more reliant on indirect methods, and
thus more vulnerable to lower CPMs.
Of the 3,500 app developers who participated in a worldwide
survey conducted by research firmVisionMobile between October
and November 2012,45% of game developers and 49% of
entertainment app developers said they integrated a third-party
service within their app to generate ad revenue.Among the most
experienced app developers—i.e.,those that developed more than
16 apps per year,whichVisionMobile contends are developers
working for large publishing houses,software companies or
agencies—60% said they relied on third-party ad services to
generate revenue.The service used most—by nearly two-thirds of
those surveyed—was Google’sAdMob network.
% of respondents
Mobile Ad Services Used by App Developers
Worldwide, Nov 2012
AdMob 65%
Inneractive12%
InMobi 12%
Apple iAd 11%
Flurry 7%
AdWhirl4%
Note: those who use mobile ad services (networks & exchanges)
Source: VisionMobile, "Developer Economics 2013: Developer Tools - The
Foundations of the App Economy" sponsored by AT&T, Mozilla and Nokia,
Jan 23, 2013
150871
Given roughly half of all mobile ads are served within apps,
VisionMobile’s data suggests a large portion of mobile ads are
sold indirectly. An older and smaller survey of US publishers
conducted by InsightExpress in December 2011 for mobile
ad exchange Mocean Mobile implied the same. Roughly half
of the 95 publishers surveyed said they were responsible
for selling 50% or less of their mobile inventory themselves,
leaving the balance to be sold indirectly or left unfilled.

Granted, the amount of inventory sold directly vs. indirectly
will vary greatly by publisher and developer. But, if the optimal
business model for display advertising is to sell a large volume
of premium inventory at premium prices, the reliance on
indirect means of selling is undercutting the earning potential
of mobile publishers and app developers.
On the other hand, advertisers who fish the waters of mobile
ad networks and exchanges are finding premium inventory
and reeling it in at bargain prices. “It’s still very early days and
a lot of the money has not migrated from desktop to mobile
the way that people’s attention and time have, so there’s a
great opportunity to unearth undervalued inventory,” said Dan
Kashman, managing director for media technology at R/GA.
Depending on the focus of a brand or agency, the balance
of buying direct from premium publishers or through ad
networks varies. Those interviewed for this report said they
typically relied on both.
“A fair assessment is we use them interchangeably. For branding
initiatives, we tend to extend a lot of our [desktop] display activity
into the mobile space and buy directly from a publisher because
there’s no ambiguity.We know what we’re getting and the type of
placements. For more performance-based [initiatives], networks
offer scale. But there’s a ton of them out there, so network buying
is a little bit more difficult,” said Razorfish’s Pahilajani.Adding that
a large portion of Razorfish’s client base has existing desktop
relationships with publishers, Pahilajani estimated the agency
buys 60% to 65% direct from publishers and the remainder
through networks or exchanges.
The 2012 ANA and MediaVest survey showed marketers’
preferences for buying directly were similar to those described
by Pahilajani. Of the US client-side marketers who were using or
planning to use mobile media initiatives, 62% said they placed
ads directly with branded mobile publishers and 47% said they
did so using independent, premium mobile ad networks.
% of respondents
Channels in Which US Mobile Marketers Currently
Place or Plan to Place Mobile Ads, Oct 2012
Branded mobile web publishers
68%
Online social networks
68%
Proprietary ad networks
62%
Mobile web search engines
59%
Microblogging sites
52%
Independent mobile ad networks—premium
47%
Mobile carriers
32%
Mobile social networks
32%
Opt-in text alert publishers
27%
Branded mobile apps publishers
27%
Independent mobile ad networks—remnant
24%
Mobile search—non-web
12%
Other
9%
Note: n=34
Source: Association of National Advertisers (ANA) and MediaVest, "2012
ANA/MediaVest Mobile Marketing Survey," Jan 15, 2013
150342
“We mainly use mobile ad networks because we can maintain
certain quality standards in conversion engagement and
control what kind of traffic we get. And, for a lower cost, we
can increase scale. Having our hands on the controls in this
way pays back massively,” said Robbie Waeschenfelder, senior
director of marketing at Ask.com.
Meanwhile, Google, Facebook and Twitter are more closely
aligning mobile buying with their desktop programs, which is an
attractive and efficient means for advertisers to reach mobile
users.“They’ve made it really easy to buy mobile specifically,” said
R/GA’s Kashman.“The buying systems at Google and Facebook
and Twitter are natural extensions of the desktop ad systems, so
it’s easy to allocate money to them as part of the overall program.
Also, the performance is easier to measure because you’re
looking at consolidated reporting, whereas the data availability
from some of the mobile ad networks is challenging.”
Finding the right balance is more art than a science, but it’s
one that affects both the cost and effectiveness of a campaign.
Mobile publishers’ tendency to sell inventory indirectly suggests
opportunities exist for advertisers to save money and improve
Factors Influencing Mobile Advertising Costs

performance by carefully researching the offerings of mobile
exchanges and networks, and experimenting with the current
balance of direct vs. indirect buying.
New and Improved Ad Formats
Compared to the influences that supply and demand and buying
and selling methods can have on costs, the degree to which
ad format can affect prices may seem minor. However, when
financial services firm Cowen & Company asked 50 US ad buyers
what factors were driving mobile ad prices higher, two-thirds
pointed to improvements made to the ad formats served by
mobile websites and social networks. Interestingly, the buyers
polled felt the ad format held more sway over ad prices than did
consumer adoption of mobile commerce or mobile payments.
% of respondents
Factors Leading to the Increase in Mobile Ad Pricing
According to US Ad Buyers, Sep 2012
Continued rising consumer adoption of smartphone/tablets
70%
Improved ad formats from mobile websites and social networks
66%
Higher consumer purchasing from smartphones/tablets
52%
Improved mobile ecommerce websites and/or improving mobile
apps
48%
Smartphones that act as a mobile wallet/allow consumers to
purchase goods at POS
44%
Improving mobile broadband infrastructure or higher speeds
36%
Source: Cowen and Company, "Internet and New Media," Nov 27, 2012
148127
Of course,the results of a survey of this size are only directional
in nature and“improved ad formats”can mean many things.
Still,the consensus among those interviewed for this report was
that standards such as the recommended ad units released by
the MMA and the Mobile Rich MediaAd Interface Definitions
(MRAID),a set of standards released by the IAB to enable greater
consistency in the delivery of rich media ad formats across mobile
publishers,were enabling advertisers to deploy ads across a wider
range of publishers.In turn,this is reducing the time,effort and
money once needed to build variations of their creative assets.
“Because publishers and platforms are creating ad servers to be
able to deliver ads that are compliant with MRAID standards, an
agency doesn’t have to develop 16 different types of rich media.
They can just develop an MRAID-compliant banner and give it
to any one of their partners to serve and track and deliver the
campaign,” said Millennial Media’s Startzel.
According to Q3 and Q4 2012 figures published by MoPub
Marketplace,a real-time bidding exchange for in-app ads,
advertisers paid more for MRAID-compliant rich media ads than
non-rich media formats.In the six months between July 2012 and
December 2012,effective CPMs (eCPMs) for MRAID-compliant
rich media ad formats sold through the MoPub Marketplace were
roughly 25% higher than non-MRAID formats,and these“improved”
formats reached an eCPM high of $1.16 in December 2012.
Performance Metrics for Mobile Real-Time Bidding
(RTB) Ads Auctioned by MoPub, by Rich Media Usage,
Oct-Dec 2012
Oct 2012 Nov 2012 Dec 2012
eCPMs
Non-rich media $0.55 $0.62 $0.83
Rich media $0.70 $0.77 $1.16
Clickthrough rates
Non-rich media 1.0% 0.8% 1.1%
Rich media 1.0% 1.1% 1.3%
Note: ads that meet IAB's mobile rich media ad interface deﬁnitions
(MRAID)
Source: MoPub, "Mobile Advertising Marketplace Report 2012 Q4," Jan 15,
2013
150391
Over the past six months,the IAB and the MMA have released
a steady stream of standards and guidelines:an update to the
Universal MobileAd Package inAugust,which fine-tuned the
recommended ad unit dimensions;MRAID 2.0 in September,with
clarifications on rich media specifications;and,in January 2013,
they jointly released new“Mobile Phone Creative Guidelines”for
public comment.According to a January 25,2013,press release
from the MMA and IAB,“the guidelines provide additional directives
necessary to empower creative shops and publishers to use
mobile for more dynamic,rich consumer experiences.Additionally,
[they also align] across the IAB’s‘DisplayAdvertising Guidelines.’”
Degree of Targeting
The more targeted the ad buy—whether targeted by device,
audience, location, or daypart—the higher the price. To target
mobile users on Facebook, for example, advertisers pay a
70% premium compared to desktop, according to social
media marketing firm Kenshoo. The firm’s analysis of 2 million
Facebook ad clicks and conversations delivered worldwide
between November and December 2012 showed advertisers
targeting mobile phones and tablets averaged a cost per
click of $1.38, which was significantly higher than the average
desktop rate of $0.81 for the same time period.
Facebook Ad Cost-Per-Click Rates Worldwide, by
Device, Dec 2012
Mobile* $1.38
Desktop $0.81
Note: *includes mobile phones and tablets
Source: Kenshoo Social, "Facebook Mobile Advertising Performance," Jan 7,
2013
149940

In December 2012, advertisers who used the MoPub exchange
and targeted iPhone users paid 30% more than those who
targeted Android phones. Those who targeted iPad users paid
the most of all ($1.40, compared to $1.04 and $0.80 CPM for
iPhone and Android phones, respectively), according to the
“Mobile Advertising Marketplace Report 2012 Q4” published
by MoPub. Contextual targeting has a similar effect on CPMs.
In the monthly “State of Mobile Advertising” report released by
Velti, the mobile marketing firm reported advertisers targeting
weather apps through the company’s MobClix exchange in
September 2012 paid a 15% premium over those targeting
education apps, and nearly a 50% premium over sports apps.
The inflationary effect targeting has on CPMs has marketers
thinking they need to choose between relevance and style,
but that’s not always true.
“We thought that a simple, direct message that spoke to our
target consumers’ needs would be more powerful than a full-
blown but less connected brand experience,” said Lisa Feria,
Procter & Gamble’s brand manager for Puffs facial tissues.
“We had planned on static units, but The Weather Company
was able to produce more dynamic ad units that helped drive
a more personal connection with our consumers. We were
able to personalize the message by connecting to a key time
when consumers use Puffs to meet their needs (e.g., it’s cold
in Brooklyn; use Puffs for your sniffles and sneeze needs).”
The nascent state of mobile advertising means it’s a place to
challenge assumptions: buying premium inventory doesn’t
necessarily require buying direct; advertising across devices,
platforms and publishers is not as burdensome as it once
was; and a tradeoff between targeting and immersive ad
formats is not inevitable. Advertisers who understand the
factors influencing the costs of mobile advertising and have a
willingness to experiment will be the most likely to minimize
costs and maximize returns.
Conclusions
Mobile ad inventory includes far more than the static
banner format. The options available to advertisers are
beginning to mirror those in the desktop display world and
include a variety of static banners, social mobile ads, rich media
formats, video ads and sponsorships. If mobile advertising still
“sucks”—and at times it does—it has less to do with the format
options and more to do with an advertiser’s inability to leverage
the context of the mobile user or take advantage of the inherent
capabilities of the mobile device in the creative execution.
In-stream mobile social media ads and mobile video
ads are in high demand, but the static banner is
advertisers’ favorite workhorse. Facebook and Twitter
have made it easy for advertisers to target mobile users as an
extension of desktop social advertising campaigns. Spending
on these ad types is increasing rapidly as a result. Meanwhile,
brand advertisers’ growing interest in the mobile channel
and consumers’ increasing consumption of mobile video
content have mobile publishers rushing to meet advertisers’
demands for mobile video ad formats. Still, the static banner
is irresistible to advertisers as its seniority among the other
ad formats means inventory is widely available and relatively
cheap, enabling advertisers to expand the reach of campaigns
or “test and learn” with little risk.
Supply of (some) mobile ad inventory outweighs
demand, which means quality inventory is being
sold for less than it is worth. Consumers’ love affair with
mobile apps has app stores overflowing and the number of ad
opportunities skyrocketing.App developers’ propensity to use
third-party services instead of selling ad inventory directly means
a significant portion of mobile inventory is being sold at bargain
prices.As a result, mobile advertisers are using a healthy mix of
indirect buying methods to mitigate campaign costs.
But stepping up from basic banners to more advanced
and better targeted ad formats means paying more.
Brand advertisers are paying premium rates to deliver
immersive mobile experiences with rich media and mobile
video formats. And overlaying targeting parameters can drive
prices up further. Industry organizations such as the MMA
and the IAB are creating mobile ad standards to facilitate the
development and buying of these newer format types, which,
given time, may ease prices of rich media and video formats.

eMarketer Interviews
Lisa Abramson
Senior Director of Marketing
Rhythm NewMedia
Interview conducted on January 15, 2013
Jonathan Alferness
Director of Product Management for Mobile Ads
Google
Taimour Azizuddin
Lead Analyst, Global Consumer Insights
inMobi
Michael Baliber
Senior Vice President, Director of Media Strategy
ID Media
Brian Colbert
Vice President of Mobile Advertising Sales
Pandora
Tim Cronin
Vice President, Global Sales and Business Development
Mocean Mobile
Lisa Feria
Puffs Brand Manager
Procter & Gamble
Creighton Grose
Vice President of Marketing and Sales
Solstice Mobile
Dan Kashman
Managing Director, Media Technology
R/GA
Ujjal Kohli
CEO
Rhythm NewMedia
Joe Laszlo
Senior Director of the IAB Mobile Marketing Center
of Excellence
Interactive Advertising Bureau
Alex Linde
Vice President, Mobile and Digital Apps
The Weather Company
Camilo Lizarralde
Group Planning Director
neo@Ogilvy
Peter Minnium
Head of Brand Initiatives
Howard Mittman
Vice President and Publisher
Wired
Rory O’Flaherty
Group Media Director
R/GA
Ravi Pahilajani
Associate Media Director
Razorfish
Tom Peyton
Associate Vice President, Advertising and Marketing
American Honda

Gokul Rajaram
Product Director, Ads
Facebook
Wade Rifkin
Vice President, Media Director
Digitas
John SanGiovanni
Co-Founder and Vice President of Product Design
Zumobi
Marla Schimke
Vice President of Marketing
Zumobi
Leo Scullin
Head of Global Industry Initiatives
Mobile Marketing Association
Mandar Shinde
Senior Director, Mobile Monetization
AOL
Marcus Startzel
General Manager, North America
Millennial Media
Gregg Stuart
Global CEO
Krishna Subramanian
Chief Marketing Officer
Velti
Elain Szu
Director of Product Marketing
MoPub
Robbie Waeschenfelder
Senior Director, Marketing
Ask.com
John Watts
Senior Manager, Digital Marketing
American Honda
Frank Weishaupt
Chief Operating Officer
Jumptap
Ken Willner
CEO
Zumobi
Jason Young
CEO
Crisp Media
Alice McKown
Associate Publisher
GQ
Will Stickney
Communications Manager
Twitter
Interview conducted on October 31, 2012
eMarketer Interviews

Related eMarketer Reports
Mobile Display Advertising: Aspirations, Revelations
and Frustrations
Tablet Advertising: Volume and Engagement Levels
Jump Up
Related Links
Alliance for Audited Media
AOL
Apple
Association of National Advertisers (ANA)
BrightRoll
Chitika
Cowen & Company
Crisp Media
Forrester Research
Frank N. Magid Associates
Google
GQ
InsightExpress
Pandora
ImServices Group Ltd.
Jumptap
Kenshoo
Keynote
MediaVest
Mocean Mobile
MoPub
Millennial Media
Mojiva
Rhythm NewMedia
Source Interlink Media
The Weather Company
Velti
VisionMobile
YuMe
Zumobi
Editorial and
Production Contributors
Nicole Perrin Associate Editorial Director
Cliff Annicelli Senior Copy Editor
Emily Adler Copy Editor
Dana Hill Director of Production
Joanne DiCamillo Senior Production Artist
Stephanie Gehrsitz Senior Production Artist
Allie Smith Director of Charts

E marketer mobile_display_ad_types-move_over_banner_ads_youve_got_company

E marketer mobile_display_ad_types-move_over_banner_ads_youve_got_company

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to E marketer mobile_display_ad_types-move_over_banner_ads_youve_got_company

Similar to E marketer mobile_display_ad_types-move_over_banner_ads_youve_got_company (20)

More from AdCMO

More from AdCMO (20)

E marketer mobile_display_ad_types-move_over_banner_ads_youve_got_company