EMARKETER ROUNDUP: OPTIMIZING MOBILE ADVERTISING - Light Reaction

 
April 2016

EMARKETER ROUNDUP:
OPTIMIZING MOBILE ADVERTISING
This year, in the US, advertisers will spend $28.72 billion to reach their targets
on mobile devices, eMarketer estimates. But—as is common with so many
digital advertising channels that offer the promise of measurability and ever-
increasing efficacy—performance measurement is still a challenge. eMarketer
has curated a Roundup of articles, trends and insights to help marketers
understand the current state of mobile advertising.

                                                                          presented by
EMARKETER ROUNDUP: OPTIMIZING MOBILE ADVERTISING

Overview

In 2015, in the US, advertisers will have spent                 Metrics Used to Measure Mobile App Success
$31.59 billion to reach their targets on mobile                 According to Client-Side Marketers Worldwide,
                                                                March 2015
devices, eMarketer estimates, an increase of                    % of respondents
65.0% over 2014 spending levels. This year,                     Number of downloads
in the US, advertisers will spend $28.72 billion to                                                                                               76%
                                                                Recurrent usage
reach their targets on mobile devices, eMarketer                                                                               48%
estimates, an increase of 50.0% over 2014                       Time spent
spending levels. But—as is common with so                                                                              41%
                                                                Revenues/leads generated
many digital advertising channels that offer the                                                                       40%
promise of measurability and ever-increasing                    Conversion rate
efficacy—performance measurement is still                                                                          38%
                                                                Custom metrics (e.g., social shares)
a challenge.
                                                                                   22%
                                                                External metrics (e.g., reduced cost in customer service due to
An April 2015 Millward Brown Digital survey asked US            fewer phone calls)
                                                                              16%
marketers about which media channels they would
                                                                None of the above
increase spending in if they could track return on                   7%
investment (ROI) better. Nearly eight in 10 said mobile, more
                                                                Note: n=526
than any other choice, including traditional media, typically   Source: Econsultancy, "Quarterly Digital Intelligence Briefing: The Quest for
considered less measurable than digital.                        Mobile Excellence" in association with Adobe, April 29, 2015
                                                                190574                                                                www.eMarketer.com

Respondents to a March 2015 Signal survey were
significantly less likely to say they could collect and         Metrics Used to Measure the Effectiveness of Mobile
                                                                Native Advertising According to Marketers
integrate data from mobile with other digital channels.         Worldwide, 2015
Worldwide, 66% of marketers said they could do this with        % of respondents
mobile web data—far below the 88% who said the same of          Clickthrough rate (CTR)                                                           56%
web data or the 76% who said the same of email—and an           Engagement rate                                                                  51%
even smaller 37% agreed when it came to mobile app data.
                                                                Conversion rate                                                            45%

                                                                Cost per conversion                                                  40%
Of course, that doesn’t mean marketers aren’t measuring
on mobile—or trying to calculate ROI. Among agencies            Number of interactions                                       33%

surveyed worldwide by Econsultancy in February 2015,            Brand lift                                      26%

38% said mobile marketing had excellent or good ROI;            Number of shares                              25%
35% of client-side marketers said the same. In January,         Brand recall                            22%
US marketers polled by the Direct Marketing Association         Dwell time                         19%
and Demand Metric reported a median 12% to 14% ROI
                                                                                                 18%       Message association
for mobile.
                                                                Note: n=209 who understand mobile native and use in campaigns or know
                                                                how to but have yet to do so
Mobile marketers report using a variety of metrics to track     Source: InMobi, "Marketer and Publisher Perceptions: Native Advertising on
                                                                Mobile," April 6, 2015
their efforts. Client-side marketers worldwide surveyed by      187885                                                                www.eMarketer.com
Econsultancy in March about mobile app success most
commonly reported using number of downloads (76%),
followed by recurrent usage (48%), time spent (41%) and

    eMarketer Roundup: Optimizing Mobile Advertising            Copyright ©2016 eMarketer, Inc. All rights reserved.                              2
revenues or leads generated (40%). 2015 research by              Completion Rate for US Digital Pre-Roll and Mid-Roll
InMobi about how marketers measured mobile native                Video Ads, by Device, Q1 2015
ad effectiveness found an emphasis on clickthrough               among ads served by FreeWheel

rates (56% of respondents worldwide), engagement rate            Tablet
                                                                                                                                          79%
(51%), conversion rate (45%) and cost per conversion
                                                                                                                                                94%
(40%). Among business-to-business marketers surveyed
                                                                 Smartphone
worldwide by Regalix in May, 79% tracked web traffic, 71%                                                                               77%
social media sharing, and 64% clickthrough rates on their                                                                                       93%
mobile marketing efforts. And according to comScore, last        Desktop
year brand lift metrics for mobile ads ranged from a low                                                                            72%
                                                                                                                                                94%
of 2.5% lift in aided awareness to a high of 4.3% lift in both
likelihood to recommend and purchase intent.                        Pre-roll                                            Mid-roll

                                                                 Note: represents activity on FreeWheel's platform, broader industry
                                                                 metrics may vary
Despite all this, and despite the fact that most client-         Source: FreeWheel, "Video Monetization Report: Q1 2015," May 20, 2015
side marketers surveyed by Econsultancy in March said            190342                                                            www.eMarketer.com

they knew what share of their traffic was coming from
mobile, and what types of devices their customers were
using, being able to track customers across devices and
understanding the differences between smartphone and
tablet behaviors were lacking.

Many metrics across a range of mobile marketing types
suggest that the ROI is there. Adobe Digital Index reported
that in Q1 2015, there were more digital video ad starts per
video start worldwide on tablets (2.8) and smartphones
(2.4) than on the desktop (2.0). Similarly, FreeWheel
reported that pre-roll video ads in the US were more likely
to be viewed to completion on tablets and smartphones
than on the desktop (though mid-roll ads performed slightly
worse on smartphones).

Viewability measurement on mobile has some issues, but
according to Sizmek, again for Q1 2015, while Flash display
ads worldwide were more viewable on the desktop, HTML5
display ads were more viewable on mobile.

When it comes to email, despite consumers’ high
propensity to check their email on mobile devices,
clicking—and converting—is another question. While
Yesmail reported Q1 2015 click-to-open rates in the US
were higher on mobile than the desktop for the insurance,
consumer services and technology industries, for example,
all other verticals had the opposite experience.

    eMarketer Roundup: Optimizing Mobile Advertising             Copyright ©2016 eMarketer, Inc. All rights reserved.                           3
Marketers Face Mobile Advertising Challenges

Smartphones are hard to monetize

Mobile accounted for more than half of digital ad            Biggest Challenges of Mobile Advertising According
spending in 2015, and marketers continue to see              to US Marketers, Q3 2015
                                                             % of respondents
increased value in mobile advertising. While there
                                                             Lack of attribution transparency
are benefits, there are challenges too, according                                                                                          41%
to Q3 2015 research.                                         Users/consumers don't convert on mobile
                                                                                                                                         37%
                                                             Lack of analytics tools
According to AdRoll, 41% of US marketers said the lack of
                                                                                                                       24%
attribution transparency was one of the biggest challenges
                                                             Inability to connect mobile and desktop users
of mobile advertising. Additionally, more than a third of                            15%
respondents said that users or consumers not converting      Inability to integrate mobile into other digital campaigns
on mobile is another challenge.                                               9%
                                                             Other
Lack of analytics tools and the inability to connect           1%

mobile and desktop users were also some of the biggest       Source: AdRoll, "State of the Industry: A Close Look at Retargeting,
                                                             Programmatic Advertising, and Performance Marketing: United States
challenges of mobile advertising, according to marketers.    2016" conducted by Qualtrics, Jan 21, 2016
                                                             203635                                                            www.eMarketer.com
Mobile devices—smartphones in particular—are not the
easiest screens to monetize. In fact, the smallest screen    Type of Screen that Causes the Most Monetization
is the one that cause the most trouble, according to         Trouble According to US Publishing Professionals*,
                                                             Sep 2015
September 2015 research from AdMonsters.
                                                             % of respondents

Two-thirds of US publishing professionals said that
                                                                                                                    Desktop
smartphones caused the most monetization trouble.                                     OTT/TV                        5.8%
                                                                                      13.0%
Tablets and over-the-top (OTT) and TV screens also caused
issues for a fair number of respondents, but were not as                   Tablet                                       Smartphone
much of an inconvenience as smartphones were.                              14.5%                                        66.7%

                                                             Note: n=138; *focused on publisher ad operations on a daily basis
                                                             Source: AdMonsters, "State of Ad Ops 2015" sponsored by Sizmek, Nov 16,
                                                             2015
                                                             201264                                                            www.eMarketer.com

    eMarketer Roundup: Optimizing Mobile Advertising         Copyright ©2016 eMarketer, Inc. All rights reserved.                         4
Native Mobile Video Lifts Upper- and Lower-Funnel Metrics

In-feed mobile video ads lift recall, purchase intent

Mobile video is a fast-growing ad format, and                  Performance Metrics for Mobile Native Video Ads
many brands are rushing specifically to create                 Among US Mobile Users, June 2015
                                                               % of respondents
video ads for native mobile environments like
                                                               Ad uniqueness
Facebook or Instagram feeds. Research suggests                                                                                                      61%
that viewing such ads improves a variety of                                                                                                   52%

metrics, from recall to purchase internet.                     Aided awareness
                                                                                                                                              52%
                                                                                                                                              52%
In a study conducted by Opera Mediaworks and comScore,         Favorability
a group of US mobile users was shown a mobile native                                                                                    47%

video ad—the kind of ad created specifically for a mobile                                                                         43%
                                                               Likelihood to recommend
feed environment.
                                                                                                                                  43%
                                                                                                                            38%
Advertisers hope to develop creative that’s a “thumb-
                                                               Purchase intent
stopper,” convincing people to stop scrolling long enough                                                         30%
to let the sound and motion begin. After viewing such                                                    25%
an ad, the mobile users took a survey about the relevant       Mobile ad recall
brand or product.                                                                                                 30%
                                                                                                        24%

When compared to a control group that hadn’t seen the             Test (viewed ad)                                    Control (did not view ad)
ad, the mobile users who watched a mobile native video         Source: Opera Mediaworks and comScore Inc., "The Impact of Native
                                                               Mobile Video Advertising on Brand Metrics," Sep 10, 2015
ad were 5 percentage points more likely to want to buy the
                                                               196749                                                               www.eMarketer.com
product. The ads produced a 4-point boost in favorability, a
7-point increase in likelihood to recommend, and a 6-point
increase in mobile ad recall.

Video ads on Facebook have proved popular with
marketers, and not only on mobile.

eMarketer estimates that US advertisers will spend $2.78
billion this year on mobile video ads on all platforms. US
spending on mobile video ads will more than double
by 2019.

    eMarketer Roundup: Optimizing Mobile Advertising           Copyright ©2016 eMarketer, Inc. All rights reserved.                                 5
Mobile Coupons Effective Way to Link Mobile Ad to In-Store Purchase

In-store beacons also help

While mobile advertising can be an effective way                     Most Effective Methods for Attributing In-Store
for companies to reach consumers, being able to                      Purchases to Mobile Ads According to US Marketers,
                                                                     Oct 2015
actually link a mobile ad to an in-store purchase                    % of respondents
is important. An October 2015 survey found that                      Mobile coupons
mobile coupons can help.                                                                                                                  62.9%
                                                                     Using mobile phone as in-store point of purchase
                                                                                                           36.1%
According to research by Marchex and Digiday, almost                 SMS text offers
two-thirds of US marketers said mobile coupons were the                                                          26.8%
most effective method for attributing in-store purchases to          Attribution vendor
mobile ads.                                                                                                    25.8%
                                                                     In-store beacons
Indeed, mobile coupons are valuable. In 2015, 40.5% of                                                    22.7%
US companies with more than a hundred employees will                 Promotions in shopping apps
use mobile coupons for marketing purposes, eMarketer                                       22.7%
                                                                     Other
estimates. By 2017, that number will grow by 7.5
                                                                        3.1%
percentage points.
                                                                     Source: Marchex and Digiday, "State of the Industry: How Mobile Is
                                                                     Changing Marketing," Oct 27, 2015
Furthermore, eight in 10 US adult mobile coupon users will
                                                                     199617                                                  www.eMarketer.com
redeem a coupon or code via their mobile device for online
or offline shopping in 2015. And, in 2017, more than nine in
10 adults will do so.

Like mobile coupons, in-store beacons—which retailers are
beginning to use more of—are another effective method for
attributing in-store purchases to mobile ads, Marchex and
Digiday found. In fact, 22.7% of US marketers indicated so,
even though beacons are still in relatively limited use at retail.

Beacons also help influence in-store sales. A February
2015 forecast by BI Intelligence estimated that this year,
$4.1 billion in in-store retail sales among the top 100 US
retail locations would be influenced by beacon-triggered
messages. By 2016, that value will grow to $44.4 billion.

    eMarketer Roundup: Optimizing Mobile Advertising                 Copyright ©2016 eMarketer, Inc. All rights reserved.                  6
Mobile Video Ads Drive Brand Awareness, Engagement

Digital video ad spending is growing

Mobile video advertising brings a lot of value to                           Additionally, nearly one-third of respondents
marketers, primarily increasing brand awareness.                            said that mobile video ads were suited to mobile
                                                                            consumption behaviors.
It also helps with lead generation and better
engagement, according to a December                                         That mobile video ads get higher clickthrough than
2015 survey.                                                                desktop-based ads and are less intrusive also appealed to
                                                                            media decision-makers, but lower on the list.
Leading Benefits of Mobile Video Ads According to US
Media Decision-Makers, Dec 2015                                             Mobile video ad spending is growing faster than any
% of respondents                                                            other digital advertising format in the US, according to
Increases brand awareness                                                   eMarketer estimates.
                                                                    47%
Better engagement/interaction                                               Spending on mobile video advertising will grow more than
                                                       34%                  70% to reach $2.62 billion in 2015—over one-third of the
Suited to mobile consumption behaviors                                      estimated $7.77 billion to be spent on digital video ads. By
                                                 31%
                                                                            2019, eMarketer estimates, mobile’s share of total digital
Better user experience
                                              29%
                                                                            video ad dollars will reach 47.7%.
More authentic brand voice
                                      23%
                                                                            US Digital Video Ad Spending, by Device, 2013-2019
Better quality of those who engage/click through
                                                                            billions and % change
                             21%
                                                                                                                                                     $14.38
Lead generation
                                20%                                                                                                         $12.82

Higher clickthrough than desktop                                                                                                   $11.25
                                                                                                                                                      $6.86
                           20%                                                                                             $9.59            $5.96
Less intrusive
                                                                                                            $7.77                  $5.09
                        15%                                                                                                $3.94
None of the above                                                                             $5.81         $2.62
        6%                                                                                    $1.54
                                                                               $3.82
                                                                               $0.72                                                                  $7.52
Note: respondents chose their top 3; whether or not they currently use                                                             $6.16    $6.86
                                                                                                            $5.15          $5.65
mobile video ads
Source: Trusted Media Brands (TMB), "Can Video & Native Formats Rule           $3.10          $4.27
Mobile Advertising?" conducted by Advertiser Perceptions, Jan 6, 2016
202974                                                  www.eMarketer.com       2013          2014           2015          2016    2017     2018      2019
                                                                               Desktop*
                                                                                18.3%         37.8%          20.6%          9.8%    9.0%    11.3%      9.6%
Trusted Media Brands (TMB) and Advertiser Perceptions
                                                                               Mobile**
asked US media decision-makers to choose their top
                                                                              166.5%         113.0%          70.4%         50.2%   29.3%    17.1%    15.1%
three benefits of mobile video ads—whether or not they
                                                                               Total
currently use them.                                                            32.2%          52.0%          33.8%         23.4%   17.3%    13.9%    12.1%
                                                                            Note: includes in-banner, in-stream and in-text; *includes advertising that
Almost half of respondents (47%) said that increasing                       appears on desktop and laptop computers; **includes mobile phones and
                                                                            tablets
brand awareness was one of their primary benefits and                       Source: eMarketer, March 2015
                                                                            186665                                                           www.eMarketer.com
a little over a third said that better engagement and
interaction was.

     eMarketer Roundup: Optimizing Mobile Advertising                       Copyright ©2016 eMarketer, Inc. All rights reserved.                         7
Mobile Programmatic Display Ad Spend to Eclipse Desktop as
Automation Grows

Moving past the experimental stage

Programmatic advertising, the use of technology                  publishers increasingly look to redesign their sites in the
to automate the buying, selling or fulfillment of                style of Facebook’s popular in-feed units.
ads, is becoming the standard for marketers
                                                                 Another key aspect to mobile programmatic’s
looking to simplify the media buying process.                    advancement is video, which will exhibit swift growth over
                                                                 the next 24 months, albeit starting from a small base of
The new eMarketer report, “Mobile Programmatic                   just $1.14 billion, or 12.2% of total US mobile programmatic
Advertising: Grabbing the Vast Majority of US Display Ad         display ad spending. By 2017, that number will reach $3.79
Dollars by 2017,” explores that while programmatic was           billion, but its share will still remain small, at 18.5%.
originally used to effectively buy desktop banners, the
process has naturally expanded to mobile. Moreover,              Though these numbers may seem extremely conservative
eMarketer forecasts US mobile programmatic ad spending           to the many who are bullish on mobile video growth, it’s
will reach $9.33 billion this year and account for 60.5% of      important to note that eMarketer’s definition of digital video
total US programmatic display ad spending.                       only includes in-stream video ads (pre-, mid- or post-roll)
                                                                 and does not include many of the fast-growing a types
Mobile might be newer to the programmatic game, but              often lumped into the digital video ad category, such as
marketers have high expectations for it. A February 2015         native video or in-feed video.
survey conducted by RBC Capital Markets and Advertising
Age found that the biggest portion of US marketers cited
mobile as the channel or format expected to have the most        US Programmatic Digital Display Ad Spending,
                                                                 by Device, 2014-2017
opportunity for programmatic buying. And with many of            billions, % change and % of total programmatic digital display
the other cited areas—such as social, video and native—          ad spending
increasingly intertwined with mobile, such an opportunity is                                                   2014      2015     2016      2017

only growing.                                                    Mobile*                                       $4.44     $9.33   $14.89    $20.45
                                                                 —% change                                   234.3%     110.2%   59.6%      37.3%
                                                                 —% of total programmatic                      43.0%     60.5%   69.1%      76.3%
“A year ago, clients were only doing science experiments in      digital display ad spending
mobile programmatic,” said Craig Palli, chief strategy officer   Desktop/laptop                                $5.89     $6.10    $6.66     $6.34
at mobile marketing firm Fiksu. “They were checking ‘test        —% change                                     73.3%      3.7%    9.2%      -4.9%

mobile’ off of their to-do list. This year, we’re seeing the     —% of total programmatic                      57.0%     39.5%   30.9%      23.7%
                                                                 digital display ad spending
larger brands come in with millions of dollars, because they     Note: digital display ads transacted via an API, including everything from
                                                                 publisher-erected APIs to more standardized RTB technology; includes
now realize that if they’re not reaching their consumers on      native ads and ads on social networks like Facebook and Twitter; *ad
mobile, they’re ripe for disruption for competitors.”            spending on tablets is included
                                                                 Source: eMarketer, Oct 2015
                                                                 197076                                                          www.eMarketer.com
Facebook is playing a substantial role in mobile’s
programmatic growth. With Facebook considered a
largely programmatic platform and its US mobile revenues
expected to total $5.89 billion this year and reach $10.32
billion by 2017, its direct contribution to total US mobile
programmatic digital display ad spending will be significant.
However, eMarketer also anticipates that Facebook will
play a secondary role in fueling the growth of mobile
programmatic ad spending as both mobile web and app

    eMarketer Roundup: Optimizing Mobile Advertising             Copyright ©2016 eMarketer, Inc. All rights reserved.                       8
UK Marketers Switch on to Mobile Programmatic

Over half of mobile marketers already get programmatic

A recent study from the Internet Advertising                  Level of Knowledge About Programmatic Advertising
Bureau UK (IAB UK) indicated that 50% of                      on Smartphones According to UK Mobile Marketers,
                                                              Dec 2015
UK marketers use programmatic for buying                      % of respondents
smartphone inventory. However, the research,
                                                                                                    No
which was conducted in December 2015 by                                                      knowledge               Expert
                                                                                                   12%               12%
Circle Research, also found that among those
that advertise on mobile, 44% didn’t have good
                                                                              Little knowledge
knowledge of the practice.                                                    32%                                    Good knowledge
                                                                                                                     44%

Another way of looking at those figures, though, would
be to concede that 66% of UK mobile marketers
                                                              Note: n=301 who advertise on smartphones
professed to having either good or expert knowledge           Source: Internet Advertising Bureau UK (IAB UK), "Mobile Advertiser
about programmatic advertising on smartphones. If the         Snapshot Study 2015" conducted by Circle Research as cited in Marketing
                                                              Week, Jan 13, 2016
wider programmatic market is anything to go by, these         203337                                                              www.eMarketer.com
proportions are likely to be even more heavily weighted
toward those that are “clued in” to the programmatic          UK Programmatic Digital Display Ad Spending,
proposition in the coming years.                              by Device, 2013-2016
                                                              millions of £, % change and % of total programmatic digital
                                                              display ad spending
In eMarketer’s September 2015 report “UK Programmatic
                                                                                                          2013         2014      2015        2016
Advertising Forecast: Automated Trading on Track to
                                                              Mobile*                                   £157.0        £538.0   £1,008.8   £1,445.6
Dominate Digital Display Ad Spending,” Steve Chester,
                                                              —% change                                 328.9%        242.7%     87.5%       43.3%
director of data industry programs at the IAB UK indicated    —% of total programmatic                    35.1%        49.7%     56.1%       58.7%
that the education phase for programmatic trading at large    digital display ad spending
had largely passed. “There’s a lot more confidence in the     Desktop/laptop                            £289.9        £544.2    £790.2    £1,018.3
                                                              —% change                                 155.8%         87.7%     45.2%       28.9%
market than there was say two or three years ago when
                                                              —% of total programmatic                    64.9%        50.3%     43.9%       41.3%
programmatic was really starting to take off in the UK,”      digital display ad spending
he said.                                                      Note: digital display ads transacted via an API, including everything from
                                                              publisher-erected APIs to more standardized RTB technology; *ad spending
                                                              on tablets is included
Mobile marketers were slightly later to the programmatic      Source: eMarketer, Sep 2015
                                                              194833                                                              www.eMarketer.com
party, but with mobile taking an ever-larger chunk of
programmatic ad spend, the education phase is likely
to accelerate quickly. eMarketer estimated that mobile
accounted for just 35.1% of programmatic digital display
ad spending in the UK in 2013. However, by 2016, that
proportion is forecast to reach 58.7%. Although UK mobile
marketers are relatively well-versed in trading smartphone
inventory programmatically, it’s apparent that more need to
get up to speed.

    eMarketer Roundup: Optimizing Mobile Advertising          Copyright ©2016 eMarketer, Inc. All rights reserved.                           9
New Data Will Help Advertisers Get More from Mobile Programmatic

                       Beth Gilmore                             eMarketer: How will ad targeting improve this year?
                       Head of Global Demand
                                                                Gilmore: Data is going to be huge this year. Publishers are
                       MoPub
                                                                getting smarter about what they want to do with their data
                                                                and how they want to transact their data to advertisers,
                                                                especially in a programmatic setting. New data is going to
New and improved data that’s becoming                           be available. It’s up to the exchanges and platforms that are
available this year will allow advertisers to better            supplying this data to make sense of it so that it transacts
target their most desirable audiences via mobile                across channels.
programmatic, according to Beth Gilmore, head
                                                                eMarketer: What’s the level of interest in
of global demand for Twitter-owned mobile
                                                                location targeting?
ad server and exchange MoPub. eMarketer’s
Tricia Carr spoke with Gilmore, whose focus is                  Gilmore: Location has become the most desirable first-
the mobile in-app inventories within MoPub’s                    party data that an advertiser can get from mobile. That’s
programmatic exchange, about what mobile                        what makes mobile unique—you can find your user
advertisers should focus on in 2016.                            wherever they are. Brands should know that they’ll have
                                                                to pay a premium for it as it becomes more desirable and
                                                                differentiates mobile against desktop, TV and all of the
eMarketer: What opportunities in mobile in-app
                                                                other platforms.
advertising are important to marketers’ overall digital
advertising strategy?                                           “Location has become the most desirable
                                                                 first-party data that an advertiser can get
Beth Gilmore: One is desired audiences and users
                                                                 from mobile.”
that are available in mobile. There is a misconception
that desirable users and inventories are only in labeled
                                                                This year is also going to be all about verification with third-
premium content—for example, “I can only find Joe
                                                                party data providers—making sure that location is accurate
Wall Street Banker on The Wall Street Journal.” But Joe
                                                                and standardizing what location looks like in mobile. It can
who reads The Wall Street Journal also plays games and
                                                                come through many different data points, like IP address
uses utility and entertainment apps. You can find your
                                                                or DMA [designated market area], so marketers have to
desirable audience and users across all different types of
                                                                standardize what it is that they’re looking for.
app verticals.
                                                                eMarketer: Is the added expense of buying ad
“You can find your desirable audience
                                                                placements with location data worth it?
 and users across all different types of
 app verticals.”                                                Gilmore: The expense is worth it if you’re a brand
                                                                advertiser that’s looking to focus on that user at that
In mobile, data has been fragmented. Most brands just           location at that moment. Publishers are getting smarter
know the cookie, and all of the buyers that they’ve worked      about the data that they’re dipping and what they want for
with give them user profiles or audiences based on the          a premium.
cookie. But data is going to be the new term for mobile
programmatic this year. It’s going to be easier for brands to   Advertisers might not understand how cheap mobile is
target their desirable audiences on mobile because of the       right now—it’s much cheaper than desktop and there’s
advancement of data.                                            still more supply than demand at this point. This is their

    eMarketer Roundup: Optimizing Mobile Advertising            Copyright ©2016 eMarketer, Inc. All rights reserved.      10
opportunity to get in and take advantage of location,               Now we’re seeing a switch. Performance marketers think
and mobile advertising in general, before it becomes                of themselves more as brands. They have TV commercials,
more expensive.                                                     they want to make sure that their ads are high-quality
                                                                    and the view is just as important as the install. Brands are
eMarketer: What metrics are most important when                     trying to drive performance metrics like clicks, installs and
measuring mobile programmatic?                                      lifetime value.

Gilmore: Over the past few years, we’ve seen brand                  It’s been interesting to see that transition, but you need all
advertisers in mobile not knowing what convergence they             of the above. You can’t just run campaigns that are going
wanted. All they focused on was pushing impressions.                to drive installs or views. Campaigns should have clear
Performance marketers were the complete opposite—they               metrics and run the gamut.
just tried to drive that app install. They just tried to find the
lifetime value of the user and only target users that they
knew would spend money within the app.

How Personal Capital Optimizes User Acquisition, Conversion
Across Channels

                       Mark Goines                                  event. We have a dozen conversion events that we
                       CMO                                          monitor. We look to optimize against those conversion
                       Personal Capital                             events, and they’re different based on channel.

                                                                    For example, an application install is a different conversion
                                                                    event than a registration from that install that occurs on the
Mobile is vital for user acquisition and customer                   device. There’s also a different event that occurs when that
engagement at Personal Capital, the creator                         person downloads our app and then registers it, not on the
of digital wealth management tools where                            phone but on the web.
users can aggregate their financial accounts,
                                                                    We have to be multichannel-capable in our tracking and
determine their net worth and engage with
                                                                    therefore align our tag management system in a way that
financial advisors. CMO Mark Goines spoke with                      allows us to track that user through their journey—not
eMarketer’s Bryan Yeager about how the firm                         necessarily the journey that one specific vendor has in
uses marketing technology to optimize cross-                        mind for an install that becomes a registered item on the
channel acquisition and conversion and how it’s                     phone. We use multiple technologies. We then integrate all
finding scale beyond digital channels.                              that data into a single view of the user’s journey and try to
                                                                    do attribution from that.
eMarketer: How do you track the path from user
                                                                    We also use the multistage influence model. In other
acquisition through customer conversion across various
                                                                    words, we might talk to somebody seven or eight times
channels and touchpoints?
                                                                    before they register. We want to track their journey to
                                                                    those different touches through various integration to tag
Mark Goines: We have a robust implementation of
                                                                    management systems so that we can then say, “This is the
tracking against lead source. We originally used and still
                                                                    ninth time, and finally they registered with us. How did we
largely rely on a last-click attribution model to a conversion
                                                                    get them there?”

    eMarketer Roundup: Optimizing Mobile Advertising                Copyright ©2016 eMarketer, Inc. All rights reserved.      11
“We want to track their journey to those                         Goines: One of the challenging things about the direct
 different touches through various                               digital channel—particularly when we narrow our audience
 integration to tag management systems                           targeting to identify highly qualified users—is that we
 so that we can then say, ‘This is the ninth                     hit scale and there’s not much more capacity. We began
 time, and finally they registered with us.                      aggressive testing of direct mail and television. These are
 How did we get them there?’”                                    scalable mediums if you can solve for the same audience-
                                                                 targeting puzzle.
eMarketer: What influence do the likes of Facebook,
Google and Twitter have on how your company approaches           You have to be a certain scale of company to use those
marketing technology?                                            efficiently, because you have to spend a lot of money doing
                                                                 creative packages, buying lists, building the television
Goines: At the top of the funnel, they’re very influential       commercials—those are not low-cost endeavors. We’ve
and frankly, they give us heartburn about being able             reached a scale now where those are in the realm of
to do multichannel tracking. There are certain rules.            possibility for us.
Facebook won’t let you put customized tags in URL listings.
Apple requires a generic landing page. They all have             eMarketer: How successful have these efforts been?
their particular rulesets that ostensibly are focused on
protecting personally identifiable information. For us, that’s   Since we began experimenting, we’ve seen positive results
a barrier to efficient multichannel marketing that we have       directly from them. They’ve also had a positive effect on
to solve for.                                                    our other channels—this cross-channel impact that occurs
                                                                 when you start building brands, if you will.
eMarketer: How do you overcome those challenges?
                                                                 Even though we focus on a direct-response model, we ask
Goines: We continue to find new technologies, new                people to come and visit our site and register. We measure
platforms and new permissions with those partners                the effectiveness of each of those programs by the amount
that allow us to execute our multichannel marketing              of direct response they create, but it seems that those
strategy efficiently.                                            mass media are helping to lift all boats for us.

Facebook and Twitter are helpful in terms of where we can
do better audience targeting. Facebook, for example, gives
more insights into the profiles of users in a way that allows
us to create lookalike modeling based upon successes
we’ve had. That allows us to refine our targeting into their
customer base. Of course, they charge more for that. It’s
gotten more expensive to market on their platforms with
that improved targeting.

As a marketer, you look for the opportunities, the crevices,
the creases—the things somebody else hasn’t found.
Facebook and Google have bidding systems. You’re
competing with everybody else for the same insights
that you might get, so they tend to be fleeting. Improved
targeting turns into higher pricing. That’s fair, that’s their
business. We have to be smart about how we use it.

eMarketer: Is there a place for TV and other traditional
advertising methods in your media mix?

    eMarketer Roundup: Optimizing Mobile Advertising             Copyright ©2016 eMarketer, Inc. All rights reserved.   12
Private Marketplace Investment Rises as Brands Buy in on
Mobile Programmatic

                       Mark Connon                                Brand spend is going to come in through the more
                       Executive Vice President, Platform         sophisticated agency trading desks transitioning from
                       Millennial Media                           the display world, or in some cases, the mobile pure-
                                                                  plays developing solutions for these types of brand
                                                                  buyers. Brands want to come into an environment they’re
                                                                  comfortable and familiar with. They want transparency,
As the executive vice president of platform at                    brand safety and audience guarantees, as well as a direct
mobile ad network and exchange Millennial                         relationship with a publisher. The wide-scale availability
Media, Mark Connon is responsible for managing                    of that from a technology or capability standpoint is
all demand-side partnerships with the company’s                   here. Brands that are shifting some of their spend toward
mobile ad exchange. Connon recently spoke with                    programmatic are making those asks.
eMarketer’s Lauren Fisher about some of the
                                                                  eMarketer: What type of inventory are brand
biggest programmatic trends Millennial Media                      advertisers looking to acquire through these more private
is seeing, including the rapid adoption of private                transaction methods?
marketplaces and the importance of cross-
device advertising.                                               Connon: It runs the gamut. Sometimes they are custom
                                                                  ad units, other times [the inventory] is driven by data and
                                                                  key attributes like location, audience segment or device ID
eMarketer: What are some programmatic trends you’re
                                                                  where the buy side is using their own data management
seeing play out in the mobile space?
                                                                  platform [DMP] to target their particular audience.
Mark Connon: One is the rapid move toward Deal ID and
programmatic direct. That has a lot to do with the evolution
                                                                  “Brand spend is going to come in through
of the OpenRTB standard to include Deal ID. We now have
                                                                   the more sophisticated agency trading
the bulk of our programmatic buyers using the current
                                                                   desks transitioning from the display world,
RTB standard, which enables Deal ID, and that’s been a
                                                                   or in some cases, the mobile pure-plays
rapid evolution over the last six to nine months. It allows
                                                                   developing solutions for these types of
most of the players in our world to transact via these
                                                                   brand buyers.”
private marketplaces. It’s the next phase of evolution for
                                                                  In terms of formats, video is growing rapidly. It’s an effective
programmatic capabilities.
                                                                  format for mobile. If done well, it can be incredibly engaging
eMarketer: What’s driving this mass adoption of more              and drive interactions in a way that drives significantly
private-type programmatic setups?                                 higher prices. Advertisers are more than happy to pay
                                                                  those costs because they are engaging with their audience
Connon: The foundation of mobile advertising has been             in a unique way.
the app download space, more pure direct response and
cost-per-install or cost-per-action dollars, which is still the   eMarketer: With something like native programmatic,
vast majority of spend in display. But the shift that we have     one has to imagine that programmatic creative would
seen and will continue to see is driven by consumers—the          be a necessity to execute these placements with the
amount of time and usage of smartphone and tablets.               greatest relevancy.
That’s always been an indicator of where brand spend
will be.

    eMarketer Roundup: Optimizing Mobile Advertising              Copyright ©2016 eMarketer, Inc. All rights reserved.      13
Connon: The native spec included in the OpenRTB 2.3
standard is essentially a form of dynamic creative, but it’s
not necessarily based on consumer targeting as much as it
is on with assimilating the ad unit with the look and feel of
the site.

Coming at it from the targeting lens, on the desktop,
you have the third-party cookie, which is a deterministic
solution on which to match a browser to a user. But with
cross-screen, it’s not that deterministic yet. You do see
some focusing on cross-screen to be able to capture that
data and target a user based on what they’ve seen and
what they’ve done. The next logical solution or step from
that is to dynamically do the creative as well. But that’s not
something that’s prevalent through our exchange yet. It’s
not yet a part of everyday conversation.

    eMarketer Roundup: Optimizing Mobile Advertising             Copyright ©2016 eMarketer, Inc. All rights reserved.   14
Performance
                 Matters
              Light Reaction is a programmatic performance media company.
    We use proprietary technologies and premium supply to deliver premium outcomes
   across any device or platform. We price all of our programs on a performance basis and
                                  guarantee our outcomes.

Visit us at LightReaction.com for more information
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