Brands ‘under-investing’ in mobile ads

Brands have just a “six month window” to invest in mobile and tablet advertising before prices significantly rise from their relatively cheap cost per click (CPC) compared to desktop ads, according to a report.

Adobe’s digital advertising update for the first quarter of 2012 says tablet and mobile search ads are currently an “under-invested opportunity” and that marketers should shift spend to these areas in the short term as consumer ownership of such devices increases.

In the first quarter of 2012, tablet ads on average cost 20% less and mobile about half as much as traditional desktop search ads, according to Adobe’s digital advertising update.

In the UK, mobile and tablet search ads’ conversion rates were 25% less than their desktop counterparts - but when cost and tablets’ average order values are factored in, ads on these devices are likely to offer better return on investment than traditional digital formats.

The company projects that the percentage of total search spend on mobile and tablet could get up to 15-20% of all search spend by the end of the year, with the increased demand likely to drive up CPC rates in the auction-based trading environment.

Jonathan Beeston, Adobe’s director of new product innovation, says: “Any advertiser worth their salt has already built a mobile or tablet strategy, or is in the middle of planning it now, but I think the window of opportunity [in terms of low-priced CPC] is short - in six months we’ll see a different marketplace as demand rises.”

Helen Southgate, Sky’s online marketing controller of strategy and planning, says: “The possibility of mobile and tablet accounting for 15 to 20% of search spend by the end of 2012 doesn’t surprise us at all and we’ve been working hard on our mobile and tablet strategy to avoid the risk of under serving a highly-profitable, fast growing market segment.”

The report also finds that user engagement on Facebook has increased 176% year on year in the first quarter, partly due to the social network’s recent platform changes and the release of Timeline for brands.

Marc Blinder, director of European operations for Adobe’s social media strategy team, says this is because Timeline for brands provides a far more personalised experience for users.

“Most notably,” he adds, “The ‘friends who Like this brand’ unit is larger and much more central to the design and Facebook is surfacing your friends interactions with the brand right below it. Studies have shown that seeing friends faces in websites or ads increases conversion, so it shouldn’t be any surprise that the same would hold true for brand pages.”

Adobe suggests that brands should now be investing in how this increased level of engagement relates back to their bottom line, by investing in analytics.

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