Reality check: mobile ads have a way to go

In yesterday’s Wall Street Journal, tech columnist Farhad Manjoo tackled the subject of mobile advertising, concluding that Facebook has shown the monetization problem there is a thing of the past. In fact, mobile ads are now a “boom,” he writes, with top players like Facebook poised for a “windfall.”

The problem is this: Manjoo curiously leaves out publishers like his own, The Wall Street Journal, which continue to struggle with making as much money off mobile ads as they do on desktop. In fact, mobile ad CPMs are the second lowest of any advertising medium.

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That discount is a tough pill to swallow when between a third and half of publisher traffic is coming from mobile. Despite eMarketer’s typically bullish mobile ad forecast cited by Manjoo, the reality is the mobile ad market badly trails consumption.

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Much of Manjoo’s argument rests on the idea that consumers won’t “rebel” against ads on mobile services. This is a curious argument. Obviously, consumers claim not to like ads. But the choice is paying for services or getting them free with ads. More often than not, history has shown people are more willing to pay with their attention than with their wallets. This isn’t much of a surprise. The cycle by now is well-known. Service introduces ads, some users claim they “suck,” people grow accustomed to them. Highlights at 11.

The bigger issues facing mobile ads aren’t addressed. The mobile ad world has become one of haves and have nots. Manjoo concentrates on the haves, the platforms like Facebook, but the world of publishers isn’t so luckily. The lack of a cookie in mobile is troubling. The advantage shifts in such a situation to those with user log-in data, more often than not — surprise! — the big Silicon Valley platforms. The oligopoly that is Web advertising, which is increasingly dominated by tech platforms rather than content creators, appears ready to tighten its grip.

Publishers are also faced with a dearth of effective ad formats. Facebook’s seen success with its mobile ad formats, such as those driving app installs, but most content publishers are left with dreadful mobile banners. Manjoo’s piece itself has ads from HSBC on the desktop version but none in mobile. The WSJ’s lucky enough to have subscriber revenue so it doesn’t have to rely on the pittance that mobile ads draw. Too bad most publishers don’t have that luxury.

https://digiday.com/?p=59276

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