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IAB in the News

Comments on Mobile Advertising by IABNZ Board and Council Members

Thu, 06 Oct 2016

Over the last few months we have been posting comments and opinions on topics of interest to the industry from our Council and Board Members. This months topic is Mobile Advertising.

Michael Buhagiar – Director, MADE Media

In the US/AUS the percentage of mobile advertising is much higher than in NZ. Why is NZ not at similar levels?

I think there are two reasons: Yields for NZ inventory are lower this is because supply outstrips demand and this creates a price battle offering lower rates to get the campaign budgets. Creative Agencies are still in control of the initial campaign budgets and implement advertising strategies that involve the biggest margins and returns to their specialties with Print & TV. So the budget remaining is then slowly split into other mediums. Mobile tending to be the last in the food chain.

What do you see as the opportunity for mobile advertising?

I think the SME & Services market will increase their spend and focus on mobile in the next year or two. Personalised, dynamic creative messaging and localised targeted messaging as the volumes increase overall these options will become more and more popular and effective.

What percentage of growth are you expecting from mobile advertising?

We forecast between 40-60% because a lot of the revenue goes through the media agency self service platforms but I can see the 120-150% increases overall to continue for another year at least.

 

Toni Knowles – General Manager, VeNA

In the US/AUS the percentage of mobile advertising is much higher than in NZ. Why is NZ not at similar levels?

Speaking from a mobile video perspective, a challenge for NZ has been lack of inventory from the domestic publishers and that’s had a knock on effect in terms of the solutions that are sold in to brands and agencies. That’s changing however. Additionally I believe lack of understanding and path of least resistance is at play in our market. It’s sometimes easier to stick to what’s known and has gone before – mobile is seen as (and sometimes is) ‘harder’ in terms of implementation, delivery, and tracking across the ecosystem. Our entire industry needs to step up on this one.

What do you see as the opportunity for mobile advertising?

With most publishers reporting that over 50% of their digital traffic is now mobile, it’s a must to focus on for publishers, agencies and their advertisers. With the smaller screen, video formats are key. From a publisher’s point of view, video offers more lucrative revenue, and as a result publishers can show less advertising overall, creating a better audience experience. Digital video is becoming more crucial for many brand advertisers who have previously relied mainly on TV. Mobile offers the opportunity to reach audiences who are becoming harder to target via traditional channels and even desktop - or who have already moved away from traditional channels.

Time Spent vs. Money Spent (on mobile advertising) - where do you see the opportunity?

In order to close the gap between time-spent and spend, the opportunity is for the market to better understand that there are mobile opportunities here and now, to achieve scale. Also a better understanding of consumers’ mobile consumption. A lot of time is spent in apps – there are decent volumes of in-app mobile video available in this market right now. For publishers where the mobile traffic might be predominantly coming from clicks on article links in social feeds, meaning less direct traffic and less inventory to monetise (they’re often left with one article to monetise per user visit), the opportunity is to look at offering new ad formats – for example native out stream video formats like our “In-Article” format.

What percentage of growth are you expecting from mobile advertising?

It's off the charts! I hope my expectations are a reality.

 

Jono Zhang – Technical Manager, Fairfax Media

In the US/AUS the percentage of mobile advertising is much higher than in NZ. Why is NZ not at similar levels?

Our mobile STR is better compared to the NZ average (3%?). We think the reason of an overall low spend level in mobile is due to the knowledge gap when it comes to tracking, and concerns for conversions as most users are still more comfortable making transactions within a desktop environment.

What do you see as the opportunity for mobile advertising?

We see native advertising in mobile as a big growth opportunity.

What percentage of growth are you expecting from mobile advertising?

We're expecting over 100% growth in revenue YOY.

 

Rhys Heron – Managing Director, Mi9

In the US/AUS the percentage of mobile advertising is much higher than in NZ. Why is NZ not at similar levels?

There is a natural lag between the New Zealand and Australian and US markets but it is diminishing. There may also be an element of under-reporting at play, but even allowing for this, New Zealand remains behind on a relative basis. It may be that agencies, publishers and the industry in general haven't done a good enough job communicating to advertisers the shift in time spent from desktop and other media to mobile. The advertising dollars should follow the audience but it seems slower here than comparable markets. I believe it will also take the investment of some bold household New Zealand brands in flagship mobile advertising campaigns to generate industry hype and lower the barriers for other advertisers to commit marketing budget to mobile advertising in proportion to audience time spent and engagement on the device.

What percentage of growth are you expecting from mobile advertising?

I'm expecting mobile to grow at rates close to 100% year-over-year in FY17, albeit from a relatively low base. It's critical publishers and agencies are positioned to capitalise on this growth through their proposition, platforms and people.