I attended Digiday Mobile in Los Angeles last week. It is interesting to see how fast the mobile industry is moving. The conversations around mobile are getting more and more sophisticated every day. As one panelist Matt Doherty, Associate Media Director at BrandinHand stated, the conversation has shifted from why do mobile to how to do mobile.
A recurring theme throughout the day was a call for better mobile metrics. @akgrenier tweeted during the event “I’m still amazed how many mobile advertisers are supporting old-media metrics such as SOV to measure success.” Indeed, if that’s the state we are in, there is a mountain of work in front of us.
41.4 percent of Mobile ad agencies surveyed stated that “Measuring success” was the biggest pain point in mobile advertising.
In continuation, Mobile ad agencies stated that “engagement” and “cost per user acquisition” were the most important metrics in helping to evaluate mobile campaigns. At the same time, ad impressions and CTR were not considered very important measurements.
Here is the problem. When Mobile publishers (selling ad inventory to Mobile ad agencies) were asked how they charge mobile advertisers, they overwhelmingly stated they charge on a CPM basis.
There is a major disconnect here between what advertisers want and what publishers offer! Cost-Per-Click was ranked as the second most popular way of charging mobile advertisers, but that metric will not work either. As Brian Wong, 19-year-old entrepreneur and founder of Kiip emphasized during panel discussion, up to 60% of all clicks on mobile ads happen by mistake. That is a lot of wasted clicks.
(By the way, check out this video of Brian Wong. This dude has some spunk)
The good news is everyone in the industry recognizes that in order for mobile to compete with online and traditional media vehicles, getting standardized measurements of success is crucial. Just yesterday IAB and the Mobile Marketing Association released the first ever “Mobile Web Advertising Measurement Guide.” Great first step.
Application marketing and CPI
Specific to app marketing, Sourabh Niyogi CEO of mdotm, which specializes in performance-based in-app advertising, made the case for RPU or revenue-per-user as the most relevant measure of success. It is not about how many downloads you get of an app; it is about the engagement you get from your users and how you can convert this into revenue streams. For example, if you make $750 from 1000 app installs the RPU is $0.75. In the example Mr. Niyogi provided, the advertiser ran an AdMob campaign and received a decent CTR of 0.41% and a cost per download of $11.37. However, since the RPU was $0.75, in reality the advertiser spent $11.37 to receive $0.75 in revenue.
Rather than using CPM or CPC, the best metric to go by is CPI or cost-per-install. If the RPU is higher than the effective Cost-Per-Install then you profit.
Here’s how it is done on mDOTm’s network:
- Implement a Universal Tracking Code in your app (needs to be hard coded in)
- Provide creative and specify CPI bid
mDOTm then gets you the installs in one of two ways:
- From banner ad inventory running on a variety of publishers’ apps (CPI bids $0.75-$7/install)
- From incentivized inventory where users basically are paid to download your app (CPI bids $0.25-$0.75)
To download mdotm’s full deck, click here.