//Terence Eden /July 24 / 2013
Choosing and using a mobile ad network
The world is mobile. From downtown Moscow to the deserts of the Sahara, everyone is transfixed by the glowing screen of their mobile phone. More iPhones are being produced every day than babies are being born. The GSMA, a mobile industry association, estimates that more people have access to the internet via their mobile than via a traditional computer. The small screen is big and it’s getting bigger.
All of this represents an amazing opportunity and an incredible challenge to news organisations who want to engage with their audience and generate revenue to fund their journalism.
As the mobile phone has become the primary means of accessing information, entertainment and socialising for billions of people, mobile advertising has become the primary means of remuneration for content owners.
In many countries, mobile advertising is a mature industry. No longer the preserve of dubious links offering “Free Crazy Frog Ringtones!!” – mobile advertising is used by global and local brands to drive engagement with users. If it’s still in its infancy in your country, it won’t be for long. It offers a credible and sustainable way for media organisations to produce their content at no direct cost to their users.
In the old-fashioned days of advertising, every newspaper would have an ad-sales desk. Hordes of salesmen (and it was nearly always men in my experience) would shout down the phones trying to convince companies to buy a quarter-pagePageA document having a specific URL and comprised of a set of associated files. A…//read more advert in the weekend edition.
All that has changed. Rather than employing sales people to negotiate directly with potential advertisers, most mobile sites use an Advertising NetworkAdvertising NetworkA company that provides sales representation for multiple independent websites…//read more .
Understanding ad networks
- A business owner creates a space for advertising on their mobile site (or app). This is called a “slot”.
- The advertising network analyses the content on the page and the people who are visiting it.
- The advertising network then conducts real-timeReal-timeEvents that happen “live” at a particular moment. When one chats in a chat…//read more bidding among the advertisers. It looks through all the adverts that it has on its books, matches up the adverts that it thinks will get a high rate of engagement, then sees which company is willing to pay the most to be shown at that specific time, on that specific page, to that specific user.
- The advert is then shown to the user in the page’s slot.
All of this happens in just a few milliseconds.
Broadly speaking, there are three ways that mobile adverts make money for content owners: CPMCPM (Cost per mille)Online advertising can be purchased on the basis of what it costs to show the…//read more , CPCCPC (Cost-per-Click)CPC or cost-per-click is the cost of advertising based on the number of clicks…//read more and CPE.
CPM – Cost Per Mille is the most “traditional” way of advertising. It is also the least profitable and is falling out of favour. It simply measures how many times the advert is shown to a user. For every thousand (mille) impressions a fixed sum is paid.
CPC – Cost Per ClickClickA click can denote several different things. It can be a metric that…//read more is the most common way of measuring mobile advertising. Whenever a user clicks on a mobile advert, a variable sum of money is paid out. Depending on the advertiser, and the market, this can be anywhere from a tenth of cent to a dollar.
In some cases, the advertising network will track whether the user went on to purchase a product or install an app based on clicking an advert – if so, it will pay out more money to the content owner.
CPE – Cost Per Engagement is the newest – and potentially most profitable – method of mobile advertising.
Using HTML5 – the latest version of the code that creates web content – it is possible to create interactive adverts which don’t result in the user leaving the site. For example, clicking on an advert could play a trailer for a movie. In this case, the advertising network pays out every time a user engages with an advert.
Mobile advertising networks
There are dozens of mobile advertising networks available. The industry is still relatively young and contains many companies which have grown rapidly in just a few years.
When choosing a mobile advertising network, be sure that the company has an account manager located in the same country as you, and also ensure that they have sales teams in the countries you wish to target your content. Finally, make sure they support the platforms that you are currently on – and those to which you wish to expand. For example, you may be mobile web only now, but do you have plans for an Android app?
While there are hundreds of mobile advertising networks (httpHTTP (Hyper-Text Transfer Protocol)The format most commonly used to transfer documents on the World Wide Web.//read more ://mobithinking.com/mobile-ad-network-guide), there are a few major players.
InMobi started in Bangalore, India, and has rapidly expanded into Russia, Asia, Africa and Europe. They support mobile web, Android, iPhone, and Windows 8. The author is a former employee of InMobi.
Google is well established in the mobile advertising world. AdMob will only work on SmartPhone apps – it will not work on mobile websites.
Google’s AdSense platform allows publishers to monetize mobile websites. If you already use AdSense for Web, you will be familiar with its layout and how it works.
With offices from Buenos Aires to Singapore, Amobee is well placed to integrate with a variety of mobile devices in a wide range of markets.
Specialising in Asia and Africa, BuzzCity is serving billions of mobile adverts every month. It can target mobile web, Android, and iOS – as well as older devices such as BlackBerry and J2ME.
Dedicated to the Latin American market, Hunt has seen huge growth over the last few years. It can deliver adverts to mobile web as well as app.
In addition to choosing an ad network, there are several other things to consider when working with mobile ad networks.
It is vital that your mobile advertising network allows you to maintain quality control on the advertising you are showing. For example, you may decide that you don’t – or legally can’t – show gambling adverts. All good networks will offer you fine grained control over what content gets shown on your site.
All networks will let you filter out adverts by category. Some will let you filter by keywordKeywordSpecific word(s) entered into a search engine by the user that result(s) in a…//read more or destination URL. That means you can block your competitors’ adverts from appearing on your site.
Make sure that your network will fully explain how their filtering works – your reputation may be at stake if you allow advertising which runs counter to your editorial position.
Of course, the more adverts you filter out, the fewer adverts may be shown. This will lead to a high NFR…
One important thing to consider when choosing a mobile advertising network is their NFR – No Fill Rate.
Every time you request an advert from your network, they will perform a complex series of calculations to determine which advert will be best suited to your content and your visitors. On occasion, they may find that they have no suitable adverts – or their advertisers’ budgets have been depleted and they cannot afford to advertise with you.
At this point, the content owner is faced with either showing the content without advertising, or using house advertising.
Most mobile advertising networks will let you run “house adsHouse adsAds for a product or service from the same company. “Revenues” from house ads…//read more ” at no extra cost. A house ad is an advert for your own internal products and services. For example, a newspaper may run a house ad encouraging readers to download their branded Sudoku app or to subscribe to the paper’s print edition.
Running house ads is a great way to show off your own content to your readers. It is also a low-cost way to deal with NFR.
Why choose just one mobile advertising network? Rather than signing a contract with a single provider, it’s possible to use an advertising mediator.
The concept behind mediation is simple, you engage multiple networks to bid against each other for your advertising locations. If one network has a high NFR you can use another network to ensure that the advertising location is filled.
You can choose which advertising networks you want to integrate with your mediator – and which you wish to exclude.
With most mediation networks, you will still have to sign contracts with each individual advertising network.
There are two potential downsides to using mediators. First, they may take a percentage of your earnings as commission. So while you may get more advertising, it may not be as profitable.
Second, you run the risk of duplication. For example, suppose that your primary advertising network has shown the user a Coca-Cola advert. After displaying the advert 5 times, the network may conclude that as the user hasn’t engaged with the advert, it’s unlikely to elicit a response and so it will stop showing it – thus generating a NFR. At which point, your mediator will pick another advertising network which will start showing adverts for Coca-Cola.
This is a waste of time for all concerned – and is particularly likely to annoy your users if they are bombarded with the same irrelevant advertising.
Here are some of the major mediation platforms:
Mobile ad formats
Mobile phone screens vary in size and shape. That’s why it is important to choose a mobile advertising network which supports a variety of advertising formats. As well as the “traditional” banner adBanner AdBasic ad units that are usually embedded within a site, application or game and…//read more – which takes up the width of the screen and usually around 10% of the height – there are several other formats which may be suitable for your content.
Taking advantage of HTML5 features allows mobile advertisers to break out of the banner. When a user clicks on an advert, they are not taken to the advertiser’s site – instead, the advert expands and its contents are displayed in situ. The user can then watch an animation, view a video, interact with the contents, etc.
These sorts of adverts are popular with users due to their fun and interactive nature, but because they require a modern web browserBrowserA software program that can request, download, cache and display documents…//read more and a high-powered phone, they aren’t available to all users.
An interstitialInterstitialAds that appear between two content pages. Also known as transition ads,…//read more advert comes “between” the pages of a site. For example, clicking on a news headline may take the user to a full screen advert for Volkswagen’s latest car, the user can then click through to their desired content.
Although interstitials have reasonably high engagement rates, they also can negatively impact your brand. Some users find the disruption of an enforced delay to their instant gratification deeply annoying. Interstitial use should be very carefully tested before deploying.
How much money can a content company make?
By some estimates, the mobile game “Angry Birds” is the most popular way for people to spend time on their phones. An estimated 65 million minutes of gameplay per day nets the company around US$1 million per month!
It’s relatively easy to construct a formula to estimate the revenue a content producer can expect to receive via mobile advertising.
Let’s make the following assumptions:
Every page on the site has 1 advert.
There’s a 5% NFR. This is variable depending on your advertising partner and mediation network.
CPC is 10c. Again, this is highly variable. If your site attracts viewers likely to click on adverts for Rolex watches, this could be much higher. If your readers are less wealthy, that CPC could be lower.
The click-throughClick-throughThe measurement of a user clicking on a link that re-directs the user’s…//read more -rate (CTRCTR (Click-through rate)Used to measure the success of a mobile or online advertising campaign. CTR =…//read more ) is 3%. That is, for every hundred adverts shown, three are clicked. That’s the industry average – although it will differ depending on sector and the quality of the adverts.
Pages X Fill Rate X CTR X CPC = Earning.
100,000 X .95 X .3 X .10 = $2,850
This formula contains a lot of assumptions about demographic and advertising partners. The best way to increase your revenue is to work closely with your advertising partners, let them know the demographicsDemographicsCommon characteristics used for population or audience segmentation, such as…//read more you are targetting, make sure that they understand the areas that you work in, send them whatever keyword data you can so that they can expertly target the advert to the reader.
Finally, none of this works without a sizeable audience. Make sure your content is compelling and keeps the user visiting your site.
How much are other content providers making?
Naturally, it’s hard to find detailed, commercially confidential information. The Pew Research Center’s Project for Excellence in Journalism in the US recently published a detailed report into how newspapers are coping with mobile advertising. It’s well worth reading.
Highlights include a newspaper making $200,000 per quarter from their “non-traditional” advertising – not bad for a circulation of 50-60,000. Other news providers talk about expecting triple-digit mobile advertising growth over the coming year.
As the world shifts inexorably to mobile, we can expect a larger percentage of revenue to come from users engaging with content on their phones and tablets.
As audiences shift to mobile, if your advertising strategy doesn’t take this into account, you are missing an opportunity.
Choosing a mobile advertising network does not need to be a complex affair. All good networks will make it easy for your web or app team to integrate advertising into your products.
If, at any time, you feel dissatisfied with the performance or quality, the level of competition in the market is such that it should be easy for you to switch to a different network.
Article by Terence Eden