The state of mobile advertising

The likes of Facebook, Google and Snap are driving the rapid growth of mobile advertising, which includes social, video, search and programmatic. Here’s a look at the state of mobile advertising, based on industry reports and the takeaways for marketers.

The major takeaways

The key numbers

The agency view
Social video is a big driver for mobile advertising’s growth, due to platforms like Periscope and Facebook, and Snap pioneered a short vertical video format that has been adopted by more and more publishers. But mobile growth is mainly driven by platforms — agencies never intend to spend big that way, so the potential of mobile advertising is largely unrealized, according to Travis Johnson, global president of mobile agency Ansible.

“Agencies are spending a lump sum on Facebook, for instance, but they never plan intentionally to carve out a budget for mobile,” he said. “Their ad budget goes where the audience is, and most of Facebook’s audience is on mobile.”

Johnson also said that as social video is exploding, how advertisers fit into and further monetize live-streaming environments like Periscope and Facebook Live is unclear. And 10-second Snap videos pose a challenge for creative shops that get used to creating 30-second and 45-second video ads.

“What does a good Snap ad look like? Does it look more like a banner ad? Or does it look more like a video? I don’t think agencies have cracked the code,” he said. “In terms of advertising on Snap, measurement is one objection from advertisers, and pricing point is another. The entry point [of Snap advertising] is hundreds of thousands of dollars, which is very high for most brands.”

The challenge
Johnson also said a big hurdle in mobile advertising is that many companies haven’t yet optimized their own assets for mobile. “Lots of clients still have bad mobile website or app experience while spending all the money to drive their consumers there, frustrate them and make them leave,” he said.

To Tom Buontempo, president of social media agency Attention, the biggest challenge in mobile advertising, specifically with new ad formats and the explosion of video, is still cross-platform measurement. Because every platform — be it Facebook, Google or Snap — is creating its own walled garden, attribution continues to be a challenge, he said.

“I’d also expect Amazon to come on strong [in mobile advertising] in the near future as it fine-tunes its offering,” Buontempo said. “And I wouldn’t discredit the full ecosystems that cell carriers are creating with major content players they’re acquiring or partnering with.”

Sign up to get the day’s top stories at 6am eastern.