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Mobile Ad Strategy Impacts Inventory and CPMs

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Mobile advertising unit

A mobile advertising strategy has important consequences for ad inventory, ad placement and site CPMs.

Developing a mobile version of a website has many benefits for the people who visit it via mobile devices. But it also comes with important consequences for advertising.

The percentage of mobile traffic varies from site to site depending on the sites’ focus. It is common for the total to range from 30 to 50 percent of all visitors and sometimes higher.

The Impact on Inventory

Some sites with direct sales for advertising often reach 80 to sometimes even a 100 percent sellout rate for their inventory.

The usual answer to that problem is a focus on growing audience and the inventory that goes with it. But it’s not always easy to do.

The following scenario is both possible and fairly easy to imagine:

1. A site doesn’t have a good mobile version and decides to build one.
2. At least 20 to 50 percent of its visitors are mobile.
3. Some 90 percent of its ad inventory is sold out.

A typical horizontal mobile banner ad unit is 320 x 50. That unit has to replace the desktop unit — such as 728 x 90 — on the existing site.

The site launches a mobile product and loses 20 to 50 percent of its 728 x 90 to the 320 x 50 ad unit. Even worse, the desktop version of the site has three to five ad units, while the mobile version has two (a common scenario to compensate for the slower speed of mobile sites).

Why does that matter? Because the advertiser in a direct sales environment didn’t pay for a 320 x 50 ad unit. They paid for the other, much larger units.

But the total inventory for those units just took a dive. The advertiser’s campaign under delivers, they get reimbursed for the shortfall, and the site sees a drop in ad revenue.

How to Prepare for Mobile Advertising

One option for a site that can’t afford to lose desktop ad inventory is using a 300 x 250 ad unit rather than a 320 x 50. The downside is that the ad will consume half of the viewing area on a 320 x 480 phone. The resulting experience for the user will be unpleasant.

A second option is waiting for a dropoff in campaign inventory so that no existing client runs into a shortfall of impressions for desktop ad units.

The third option has the greatest benefits. Write contracts that include mobile inventory with desktop inventory as part of the ad campaign. That option will require some education of the client on the part of the account executive.

This option actually has some precedence with major online advertising companies such as Google, Bing and Facebook. Anyone who buys campaigns with them usually has to opt out of mobile rather than ask for it.

For the option above, it would be wise for any site thinking about developing a mobile product to include the language encompassing mobile in all new contracts. That way when the transition takes place, existing clients will be accommodated.

Whichever option works best, it is helpful to plan for the impact on ad inventory when getting ready to launch a mobile version of a website.

No Mobile and Bad Mobile

Some website publishers have no mobile advertising strategy, no mobile design or even a bad design that they never see because they only visit the site with a desktop browser. (For the record, this WordPress site uses a mobile plugin.)

Although rare anymore, some sites still don’t have mobile friendly designs. If the site has a static desktop design rather than responsive design, the mobile visitor will see a site that might be 1,024 pixels wide or even wider on a screen that is probably 320 wide and 480 or 568 deep.

As a result, the mobile visitor will have to scroll right to see the content and the ads. It is not a popular or natural thing to do for mobile users who go regularly to other mobile-optimized sites.

These visitors typically come to a non-mobile site less frequently, click on fewer pages and also click on fewer ads.

Think of it this way: A 728 x 90 leaderboard ad at the top of the page is more than twice as wide as the viewing screen. If the visitor rotates the screen to a horizontal view, the ad is still almost twice as wide.

Plenty of research indicates that people don’t like to scroll, and that means the click rate goes down.

So it makes sense to go to mobile, right? Well, yes, from that point of view, but some major consequences for a mobile advertising strategy come with that decision.

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