A new study serves as a reminder that mobile is a new medium: Publishers are toying with mobile monetization strategies and advertisers are hesitant to dive in.
The State of the Mobile Industry Report, sponsored by mobile ad network Mojiva, found that mobile advertising budgets have only creeped up slightly in the last six months. Mobile ads now represent about 13% of advertisers' total digital media spend (up from 12% six months ago).
In August, Mojiva surveyed more than 600 advertisers, agencies, mobile marketing firms and publishers/content producers (211).
"The good news is there's phenomenal usage of mobile, so much so that the advertising dollars haven't quite caught up yet,” said Mojiva CEO Dave Gwozdz. “That's great news for publishers.”
The lack of solid metrics is the largest deterrent for advertisers. Twenty-eight percent of respondents cited the inability to measure success or conversions as the most common hurdle to ad spending.
"There's no standard for metrics,” Gwozdz said. "We're finding that a lot of advertisers aren't even sure which metrics they want."
The survey confirmed a move more toward engagement and other metrics and away from click-through rates. Agencies rated engagement and cost per acquisition metrics higher than other metrics as a measurement for mobile campaigns.
The majority of agency respondents said their clients will pay a higher cost per acquisition in mobile than through other media (though almost 23 percent said they'd pay less).
Mobile Web is top revenue generator
Despite some growing pains, publishers are optimistic about mobile revenue: Nearly one-third of publishers expect mobile revenue for this year to top $1 million, according to the study. Compared to six months ago, half of publishers said revenue success with mobile has stayed the same; more than 40 percent said it was higher.
Advertising is the most common way publishers support their mobile efforts (about 48 percent), which has stayed relatively constant in the last six months. A combination of ads and subscriptions is also popular (31 percent); few publishers are using a subscription-only strategy (8 percent).
The freemium model is also claiming a stake, with almost 14 percent of publishers reporting they use neither advertising nor subscriptions (up from 12 percent). Of course, that group could mostly consist of publishers testing out the mobile waters.
Mobile websites continue to be the largest revenue-generating platform for mobile publishers ― an interesting finding in light of the continued discussion about apps versus the mobile Web — though not surprising, considering the mobile Web is still more prevalent than apps. Gwozdz said 70 to 80 percent of ad impressions on the Mojiva network happen via the mobile Web.
After mobile websites, mobile banners and iPhone apps are neck and neck as the second largest mobile revenue generators for publishers.
When it comes specifically to apps, the large majority (72 percent) of publishers said their apps are free to download and ad-supported. Another 13 percent charge for downloads and sell ads; 10 percent charge but don't sell ads; and only about 4 percent charge a subscription fee (a model that's had trouble taking off thanks to Apple's guidelines).
The biggest mobile event in the last six months, of course, was the launch of the iPad. Investment in the device skyrocketed: Almost half (48 percent) of mobile publishers now support the iPad. Android saw some growth as well, with half of publishers now supporting Android ― edging closer to the three-fourths of publishers who support iPhone.
Advertising hasn't picked up the pace yet with mobile. More than a quarter of publishers who support ads continue to say they aren't monetizing mobile ad inventory. Only 23 percent sell more than half their ad space; 12 percent report selling less than half.
The percentage of publishers who sell direct (65 percent) is about the same as the percentage of publishers who sell through ad networks (66 percent). The study didn't break down the percentage using both, though there's obviously some overlap.
The number of mobile ad networks used by publishers is on the rise, with more than a third of publishers using three or more ad networks (up from about 23 percent last quarter).
Gwozdz said publishers and advertisers are still experimenting, much like they did at the beginning of the Web. "The online world is a good indicator that it takes a while for people to figure out what works," he said.