Taking the mobile bull by the horns

By Tom Foran , written on December 6, 2012

From The News Desk

We have all heard the doom and gloom forecast. Mobile, with its tiny screen, its lack of standards, and its seemingly inordinate supply of inventory, is a death sentence for media companies. Already squeezed by the shift from print to digital, a new revenue gap has emerged -- the one between desktop and mobile. This fact was highlighted earlier this year in Mary Meeker’s 2012 Internet Trends report, which found that the average mobile CPM is just $.75, or one-fifth of the average desktop CPM, and that mobile was the primary reason the market turned on Facebook after its IPO, driving its shares down considerably.

But in its most recent earnings, Facebook downright shocked all the prophets of doom, when it far exceeded mobile projections. In Q1, Facebook did virtually zero in mobile ad revenue and in Q2  about $50M. But, in Q3, we saw Facebook deliver over $150M in mobile ad revenue, beating most expectations by a mile. Twitter is also seeing immense growth in mobile with its promoted tweets. In fact, 66 percent of Twitter users access the microblogging platform on mobile devices, and its promoted tweets have an engagement rate between one and three percent.

However, successful mobile monetization is not simply the domain of the social Web titans. Publishers like The New York Times and The Wall Street Journal deliver wonderful mobile and tablet solutions while preserving the dual business model of subscriptions and advertising. While there is much more pain to endure with a transition from print to digital, these media companies have certainly embraced the mobile revolution.

Here, we’ll explore a few key factors to consider when developing a mobile strategy.

Implement native advertisements

Facebook and Twitter have seen success with mobile because their ads are non-disruptive, contextual, and interesting to users. In other words, they’ve gone native. Though “native advertising” is something of the buzzword du jour of the online advertising industry, it has a powerful meaning when it comes to mobile. With the limited real estate of the mobile screen, a traditional pre-roll or banner ad can loom especially large and become downright irritating, which is why so few mobile ad solutions have seen true success.

Native advertisements like content recommendations, sponsored stories or promoted Tweets address this problem by adding value to the user’s experience. Moreover, because native ads reside within content, there is no impact on the inventory of banner ads available to sell.

Leverage video

Monetizing video assets is one of the best ways for publishers to make mobile viable. Over the last two years, the mobile video audience in the US has increased by 77 percent to 36 million viewers. With the increase in 4G LTE accessibility and improvement in bandwidth, this number is expected to increase even more. Not only will more ad dollars flow into this space as consumption continues to rise. But the CPMs that video ads bring in are considerably higher and can help bridge the monetization gap.

That said, publishers need to think strategically when it comes to video. One of the biggest areas of focus must be optimizing for mobile: The desktop video experience cannot simply be replicated on a mobile device. Instead, publishers should consider only showing video ads to consumers on Wi-Fi or 4G. Further, implementing shorter, skippable ads that respect the personal nature of the mobile device is crucial to a smart video strategy.

Smaller publishers can license video content to grow their inventory and play in this high value space. Having a dedicated and knowledgeable mobile product owner is especially important for small to medium publishers. Such a resource can help navigate the available options to deliver the best possible mobile video experience for consumers and advertisers.

Educate and empower the sales force

Just like the early days of Web advertisements, too many publishers are unequipped to sell mobile ads effectively. This inertia is a big reason why publishers fail to monetize on mobile. Whether it’s a dedicated mobile sales team or a specialist or two embedded with the digital sales force, subject matter expertise is crucial to better results. Publishers like ESPN and Weather Channel have sales and marketing domain experts who provide buyers with the information and solutions that go beyond tiny banners with cheap CPMs. Sponsored content, rich media and app launch takeovers are just some of the tactics mobile experienced sales folks use to command justifiably higher rates from agencies and their clients.

Mobile monetization does not have to be the subject of such dread and avoidance. Providing both content and ads that respect and provide value to consumers is the pathway to growing audience and revenue. Publishers and brands must embrace mobile and not wait until tomorrow when it’s too late.

[Illustration by Hallie Bateman]