Mobile Ads Pose Problems

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This is a scene many of us have lived out before. Whether on purpose, or more likely an accidental brush of a finger, you click and an ad begins to load. And load. But wait! First it needs to switch over to a web browser and load some more. At this point, you most likely sigh and close out of the ad to go about your business. As it turns out, you definitely aren’t alone.

A new study from Dartmouth’s Tuck School of Business reveals what may seem obvious to many: mobile ads are significantly less effective than traditional online advertising. Participants gave various reasons for preferring online ads to mobile ones, from screen size to convenience. At least 70% answered that they simply didn’t notice ads as they were too busy doing something else on their mobile device.

These findings come as little shock to many, including Sunil Gupta who wrote an article for the Harvard Business Review in March 2013 on this very topic. In his article, he stresses screen size as one of the most important factors in advertising effectiveness. If you can’t read the ad, he argues, you aren’t going to be very influenced by it. He too was concerned by the inconvenience caused by clicking (sometimes accidentally) on mobile ads. In the recent Dartmouth study, 69% of participants said it was a hassle to “return to the original position” after being redirected by an ad.

However, Gupta suggests a solution to this problem: apps instead of mobile ads. Trying to fit traditional banner ads into mobile screens is just not going to be effective. Where advertisers should turn instead, he argues, is to app development. They are more cost-effective and potentially more effective because many consumers see them as less intrusive than traditional advertising. Additionally, users spend significantly more time using apps than web browsers when on mobile devices, so companies’ focusing solely on banners ads just doesn’t make sense.

Gupta is quick to suggest that just creating more apps is not enough. Already there is a huge market for apps, and smartphone users typically only download around 40, and of those only regularly use 15. In solution, Gupta offers five strategies for success to help companies looking to get into app-based advertising: offering convenience, unique value, social value, incentives, and entertainment.

            While none of the findings of this study are shocking, they do offer an interesting insight into mobile consumers’ experience. There are some issues than can potentially be fixed by advances in technology, like slow loading times and internet access issues. However, the onus is primarily on advertisers to innovate and reach out to consumers. 

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Twitter’s acquisition of MoPub means mo’ ads?

Last week, Twitter bought mobile advertising publisher MoPub for a rumored $350 million in stock. This deal happened in light of the social media giant’s move to file for an IPO. The valuation of a company for the initial public offering of stock includes future potential revenue, so the timing of this deal makes a lot of sense. While the company has been successful in recent years, the acquisition of MoPub will only improve Twitter’s revenue from mobile advertisements.

Does this mean more ads are coming to Twitter? Probably. The company already uses ads on its mobile and desktop clients. However, 20 percent of users utilize third-party sources, and currently Twitter does not place ads into those apps. With MoPub’s help, Twitter can expand its advertising capabilities to all supported platforms and increase ad revenue immensely.

As discussed in this Bloomberg Television’s “In The Loop” segment, Twitter is a highly successful mobile advertising platform. While it may not have as extensive an audience as some platforms, namely Facebook, Twitter does have key features that contribute to its mobile advertising success. For example, its real-time conversation capabilities offer advertisers to pinpoint and reach target audiences as events are happening. The MoPub acquisition offers Twitter other services to further expand on its already successful mobile advertising platform. MoPub has previously used location-based mobile advertising, and Twitter has reportedly been preparing to do the same.

MoPub’s expertise in mobile advertising through a variety of platforms will help Twitter expand its marketing from only native apps to yet untapped third-party sources. With the imminent valuation of the company in anticipation of the IPO, increased breadth of advertising exposure can only help the company.

What all this means for Twitter users is as of yet a bit unclear. Twitter will most likely continue with its sponsored tweets on its native platforms, but perhaps these will spread to third-party apps as well. Previously ad free platforms may soon see advertisements, but it is still somewhat unknown. What is known is that Twitter is a force in the world of mobile advertising and is poised to continue its growth.

 

References:

Elvekrog, J. (Performer) (2013). Twitter is made for mobile advertising: Elvekrog. [Television series episode]. InIn the Loop. Bloomberg Television. Retrieved from http://www.bloomberg.com/video/twitter-is-made-for-mobile-advertising-evelkrog-ckly0tEOR7Chglqzat0c3g.html

Elvekrog, J. (2013, September 12). With the mopub acquisition, twitter embraces the ecosystem.VentureBeat, Retrieved from http://venturebeat.com/2013/09/12/with-the-mopub-acquisition-twitter-embraces-the-ecosystem/

Ha, A., Cutler, K. & Lunden, I. (2013, September 9). Twitter buys mopub for $350m to up the ante in mobile advertising. TechCrunch, Retrieved from http://techcrunch.com/2013/09/09/twitter-said-to-acquire-mopub/

Kessler, S. (2013, September 16). Social advertising: How twitter can compete with facebook. Fast Company, Retrieved from http://www.fastcompany.com/3017472/social-advertising-how-twitter-can-compete-with-facebook

Kessler, S. (2013, September 12). Twitter has filed for an ipo. Fast Company, Retrieved from http://www.fastcompany.com/3017372/twitter-has-filed-for-an-ipo