‘Ad agencies stalling mobile ad growth’

Online publishers claim advertising agencies’ lack of understanding about the merits of mobile advertising for online publishers is obstructing growth in the nascent marketing channel.

Publishers believe that advertising agencies are stifling revenue growth on mobile, according to the AOP.

A study of 37 media owners by the Association of Online Publishers found that more than half (55 per cent) ranked ‘a lack of focus’ on mobile from advertising agencies as having the greatest impact on revenues despite acceptance of mobile ads from consumers.

More than three quarters (87 per cent) of participants claimed that at least 20 per cent of their digital traffic is from mobile users, but only 29 per cent generate a fifth or more of their revenues from this traffic.

Despite the failure to capitalise on the growth of mobile audiences to date, 91 per cent and 85 per cent of the respondents said tablets and mobiles, respectively, pose the greatest opportunities for revenue growth, with more more than half of the respondents (62 per cent) saying that they would optimise the majority of their brands for mobile over the next 12 months.

Lee Baker, director for the AOP, says that driving revenues from mobile devices has, until now, been stifled by agencies not being “up-to-speed” on how mobile advertising works and refusing to “get stuck in.”

However, the rise of more dedicated mobile buying teams, further audience growth and better education about the discipline across the industry mean that ad agency attitudes will catch up with publisher investment over the next 12 months, adds Baker.

Tim Hussain, head of platform development and partnerships at BSkyB, says that agencies have not had the marketing budgets to fully exploit the proliferation of mobile devices in the UK, adding that the medium has not yet “made a strong enough argument as to why it should be used over other channels.”

“[Mobile] has not grown up yet. But do not expect too much of it too soon and make it mature too quickly.”

For tablet devices, the report revealed that the biggest obstacles to growth would be ad agencies reliance on low-yield ad networks and the size of audience, both on 52 per cent.

“Publishers’ use of some ad networks has also slowed the selling of mobile as mature medium”, adds Hussain. “The only way mobile will become truly identified by a planner within an agency as a proper medium is when it’s discussed like a proper medium. The discussions should be about brand engagement and not buying clicks at a certain price.”

Mark Challinor, director of mobile platforms Telegraph Media Group, says there’s a “huge” amount of education needed for agency staff still, and adds that publishers should be working closer with buyers to identify “how best to tackle mobile” when it comes to using metrics and using it as part of an integrated advertising strategy.

He adds that when agencies catch-up with audience size on mobile, ad revenues will swiftly double and that this will be new money, rather than spend transferred from one channel to mobile.

Nigel Gwilliam, head of digital at the IPA, says agencies have contributed to the growth of mobile, parti clearly in mobile display, which more than doubled year on year (187 per cent) in 2011 according to the IAB.

“Agencies handled most if not virtually all of this,” he adds, “It is clearly shortsighted for publishers not to invest in mobile and, given the levels of mobile advertising growth, somewhat peculiar to rank opinions on inhibitors to that growth.”

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