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Why Mobile Ads Score 9 Times Better than Display Banners

Last year, Canadian advertisers spent $52 million on marketing via mobile phones, a 93% increase over 2010; spending on mobile search engines ($17.1 million) and sponsorship ($15.6 million) has grown 105% year-over-year (Interactive Advertising Bureau of Canada). Google has predicted that by 2015, mobile will be the most popular online advertising platform.

And why not, when the click-through rate (CTR) of mobile ads averages 0.61%, nearly 9 times higher than the CTR for display banners? (MediaMind) But why do mobile ads have such an impact? A reasonable first assumption might be that mobile ads deliver a better click-through rate (CTR) because they’re still a novelty, so users are not yet saturated. But after taking a deeper look, there are other reasons behind the effectiveness of mobile ads. Smaller screen, higher engagement: Less screen real estate forces advertisers to create focused text, images, or videos that are more eye-catching. Furthermore, there is less clutter on a mobile screen that means users tend to pay more attention to the featured content. Finally, to compensate for small screen space, most ads are designed to initiate a response that takes the user to the next step: triggering engagement. Mobile advertising offers the ability to combine customer engagement with brand advertising. Location-based targeting: Mobile users are on-the-go, which means mobile ad networks can target based on user location.  61% of smartphone users already do local searches. Combine this with location-based services such as Google Maps and GPS for more accurate, location-specific targeting and users receive highly-relevant ads for retailers or restaurants close by.  It’s no accident that:

  • Mentioning location in a mobile ad or search result can increase CTR by up to 200% (MediaPost)
  • 20% of telecom, 25% of movie, and 30% of restaurant, and searches are mobile (Google)
  • Mobile will be responsible for $US 8 billion by 2013; or, 2.6% of all U.S. travel bookings and 6.5% of the total online travel market. (PhoCusWright January 2012)

More convenient interaction

From a single device, users can browse, purchase, and call.  When the user is at a convenient location, a well-designed mobile ad campaign takes advantage of location-based targeting to display the ad/offer and also provides a single “click to call” to reach a customer service representative. This ensures prompt, helpful interactions and higher conversion rates. If your business relies on walk-in traffic finding you, you’re a great candidate for mobile advertising.  Even if you don’t fall into the walk-in traffic category, mobile advertising still offers creative ways to catch your target audience’s attention and bring them to your website or store. Entertainment, dining, hospitality, and retail are all markets where mobile advertising has proven its effectiveness.

Mobile advertising at-a-glance

  1. Types of mobile advertising

    Mobile advertising can be as simple as a SMS text message or as visually rich as a TV commercial. Text and graphical ads are usually clickable or offer some other form of interaction such as: taking the viewer to a landing page, initiating a text message, or placing a phone call.

    • Text ads
    • Graphical banner ads
    • Graphical banners with associated text links
    • Video preview ads
    • Standard-length video commercials
  2. Mobile ad networks

    There are Canadian mobile ad networks, and US networks that also reach Canadian users. For a list and reviews, mobi has a comprehensive list of ad networks, coverage, and costs. Facebook, Google, and other social networks also offer mobile ads. Canadian-based networks include:

  3. Cost

    Depends on the targeted verticals or locations. Expect a cost-per-click (CPC) of between $0.70 and $0.25 at the low end