There seem to be competing forces at work with the ever-enhanced online audience information metrics that Napoli writes about: On the one hand, these new opportunities for metrics are letting advertisers and the media companies they buy from to gather more and more information about customers, which should allow the advertisers to more closely target their ads and enable the media companies to charge more for them.
On the other hand, they're also revealing the dirty little secret about advertising -- that people don't pay much attention to it, and they don't do much with it, either. Advertisers are wising up to this, increasingly paying only for performance rather than exposure.
So one of those factors would be driving online ad prices up, and the other one would be driving them down. As we discussed in class, it seems pretty clear that the latter factor is winning out -- online ad prices remain in the basement, despite every attempt by online media providers to pull them up.
It seems the trend is only more severe in mobile media, as I saw in this Ad Age report. The report focused on a study that found that CPM rates are only one-fifth on mobile ads what they are for desktop web ads. As the article says, mobile media presents a unique set of challenges: smaller screen size, short user sessions, and -- here's the kicker -- "privacy settings restrict targeting."
So not only do mobile media companies have the difficulty of selling advertising on an even more difficult and advertiser-unfriendly medium than the web, but they also lose out on the one big benefit with the online ad transformation -- the ability to target closely defined groups and charge higher rates. It really is the worst of both worlds for them right now.
On the other hand, they're also revealing the dirty little secret about advertising -- that people don't pay much attention to it, and they don't do much with it, either. Advertisers are wising up to this, increasingly paying only for performance rather than exposure.
So one of those factors would be driving online ad prices up, and the other one would be driving them down. As we discussed in class, it seems pretty clear that the latter factor is winning out -- online ad prices remain in the basement, despite every attempt by online media providers to pull them up.
It seems the trend is only more severe in mobile media, as I saw in this Ad Age report. The report focused on a study that found that CPM rates are only one-fifth on mobile ads what they are for desktop web ads. As the article says, mobile media presents a unique set of challenges: smaller screen size, short user sessions, and -- here's the kicker -- "privacy settings restrict targeting."
So not only do mobile media companies have the difficulty of selling advertising on an even more difficult and advertiser-unfriendly medium than the web, but they also lose out on the one big benefit with the online ad transformation -- the ability to target closely defined groups and charge higher rates. It really is the worst of both worlds for them right now.
So, is mobile content an inferior good too? (I think so.)
ReplyDeleteAre media companies just repeating the same mistake on mobile devices? (I guess so.)
Mobile ads account for 1% of ad spending in China.
http://adage.com/article/global-news/mobile-marketing-lags-world-s-biggest-cellphone-market/236088/