I’m here today at Mobile Beat 2010… Among the more useful panels I’ve watched is “Attracting Big Brands and Bucks to your App.” Here’s the roundup:
The panelists included:
- Gene Kennan, VP of Mobile Strategy at Isobar, a big digital agency that represents companies including Adidas and Marriott. He also sits on the MMA board.
- Cheryl Lucanegrow is the SVP of Ad Sales at Pandora. Things started happening for Pandora when they started developing for iPhone, causing the company to change their whole strategy to leverage mobile.
- Orr Orenstein from Photobucket (one of my clients) leads the mobile initiative and manages all mobile advertising.
- Philip Browning is the Director of Advertising and Operations, Mobile at CBS Interactive and focuses on monetization and network.
The session was moderated by Adam Towvim, the Senior Director of Business Development at Jumptap
Gene believes advertising inside of apps is exciting for brands and agencies, but very few agencies know how to execute inside of mobile. Most agencies can handle advertising inside of apps, but after ads, the big stumbling block for brands is agencies and their perception that mobile has limited reach. Isobar thinks differently about mobile – especially for advertising consumer product goods (CPG) companies. Gene pointed out that 15% of teens in the US have access to an app-enabled phone, and once you hook a kid on a specific brand in CPG, they rarely switch.
Advertising’s golden rule is hitting the younger audience and getting them loyal to your product. According to the panel, Proctor and Gamble (P&G) are thinking less about online and more about what’s happening in-store and how mobile can be used to influence the consumer’s decision to influence purchase in-store. They’re backing their entire mobile strategy out from the in-store experience out.
Cheryl likes mobile because it allows you to reach consumers throughout the day. Pandora knows your age, gender, and zip code, and they know what you’re doing inside an app. That allows them to offer relevant advertising that targets users in a more meaningful way.
Understanding who your users are is hugely important to mobile advertising. Showing brands what your users are doing inside the app and where the engagement points are most successful is critical to advertising success. Designing your placements, banner units, interstitials, etc. accordingly is key to engaging users with ads. Understand your analytics and help your click through rates by only placing ads where you think they’ll be likely to be clicked is also important. Doing this will help you command higher ad rates for your inventory.
Orr from Photobucket said he’s seen 18-20x click through on mobile vs. web property. So, monetizing mobile inventory has been incredibly successful.
Philip said developers should think carefully about which ad networks you partner with versus building your own ad sales team. If you’ve got a good app, with lots of eyeballs, you can plan for advertising success if you plan carefully. There are lots of ways to tie into the available market.
Adam agreed with Orr and Philip saying if you can make changes in the way you segment parts of your inventory by click-through rate, you can maximize the value of your inventory.
Gene referenced an Inside Express study that did a study of mobile ads served in the last year. Brands need to strive to achieve high click through with low annoyance – particularly on mobile. The ad units that have the highest click through rates with the lowest annoyance rates in mobile are standard banner ads, not interstitials. There was a little bit of a diverging opinion on the panel. Philip agreed that banner units are less annoying, but he said CBS has had some success with interstitials. He pointed out that you really don’t know what’s going to work until you try it, test it and evaluate measurement. I agree – There’s a certain amount of experimentation involved with good advertising. Gene, added a good point, saying that to a certain extent, if developers and agencies use their good judgment, they can figure out what kind of ads will annoy customers before the customers get annoyed. The annoyance factor on interstitials and pop unders are high on web, and he thinks that this will mirror on mobile. So, he encourages his clients to think before they place those kinds of ads.
Everyone agrees that in time, we’ll see what will work well in mobile advertising. The ROI on rich media units is unclear. Cheryl said she sees lower response rates on Blackberry with a smaller screen and less touch-enabled than say, on iPhone where CTR seems to be higher. Orr said Android click through is 4x what it is on iPhone. The point is that the audiences on different mobile devices may be different, and you need to think about that when you insert the ads.
Orr recommended developers look at their app analytics and merge them with their ad analytics to ensure that brands are willing to spend with you over and over again. Iterating is very important to ensuring success for the brands that advertise in your app.
A member of the audience asked about why Photobucket is seeing 4x higher CTR on Android over iPhone. Orr said that on Android, Photobucket’s users appear to be a little older. Many of Photobucket’s iPhone OS users use iPod touches, and they tend to be younger. So, when Photobucket puts ads on iPod touch devices, they think very differently about what kind of ads to serve (i.e. don’t show car ads to kids that don’t have their driver’s license).
Philip sees the same thing on Android. They’ve got an application called tv.com. It’s on both iPhone and Android, and 1 million people are using it on each platform. But on Android, they’re seeing 1-2x more page views and CTR on video than on iPhone. Cheryl says she’s seeing a similar trend on the Pandora app.
When Isobar does media buys, they do network buys with large publishers, rather than small ISVs. They’re often looking for 13-17 years audience, and it takes a bit too much time to do advertising inside small apps. However, they will do things like sponsor of smaller apps.
Adam asked the panel how app developers can create an opportunity for flexibility around skinning an app? Gene talked a bit about Tap Tap revenge, pointing out how well they did at positioning their apps for sponsorship. Philip cautions that you’ve got to get the audience first before you can get the advertising agencies interested. You need to do marketing of your apps. Others agree. Developers should think about advertising their own stuff inside your apps and other apps to get a footprint to let people know about your product.
Cheryl recommends building in a budget to get users to your app… “It’s almost like you’ve got to budget double what it cost you to develop your app to market your app.”
Gene suggested developers work with ad agencies to find a slow day for advertisers in which to advertise their app. If you do your advertising all in 1 day and get in the top 20 ads, you’ll get better exposure for your app and hopefully higher conversion to download.
Someone asks – If the CTR is higher, is the conversion higher too? Gene said that there are certain companies Isobar won’t buy from because they create high click through rates, but few conversions. He uses the example of advertising a hotel chain… The customers are clicking through, but are they actually booking a room?
Orr pointed out the common theme of relevance in advertising. Developer should make sure their ads are relevant to their audience and make sure that they have engagement with their app. Don’t serve an ad just because you can. Find the demographic that will find the ad relevant, and serve it to them. Even if you’re only driving a .1% click through rate, if each of the users that see an ad convert, you’re onto something positive.
Philip and Gene talked about how important it is to understand what’s going on downstream. Understand what your advertisers saw in terms of conversion. There’s a huge problem with conversion tracking at the moment. There’s a lot that needs to get done with conversion tracking downstream to make sure ads are truly working. Advertisers want to know how long users you’ve sent them stay on their website.
Another important consideration for developers is how gracefully a user can interact with ads and get back into the app. On iPhone, this has traditionally been difficult, but with multi-tasking OS4, this is going to get easier. The challenge will be waiting for the iPhone user base to upgrade to OS4. Bottom line – by placing ads on apps inside multitasking OSes, it’s easier to ensure that you’re not cannibalizing your users to advertisers if the OS you’re working on lets you swap back and forth between ads and apps.
The last piece of good advice from the panel was to investigate multiple ad networks to serve your ads. By investigating multiple ad networks, you’ll end up getting a better deal, but you’ll have to do a bit more management.
With mobile and web converging faster than ever, it’s becoming increasingly difficult to tell the difference between PCs, tablets and mobile phones. As convergence progresses, mobile OEMs and Operators are looking for new forms of revenue and savvy mobile developers are having to re-evaluate there business models and decide if/when it is appropriate to pay for placement and/or share new forms of revenue (including advertising) with their partners. In this article, I provide a high-level history of business models in mobile apps, and explore if/when/how developers should charge for apps and share revenue with partners. (more…)
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