The rise of mobile advertising is hitting brand owners where it hurts most – in their budgets – with most campaigns now costing 20% more than they did last year, according to research carried out by Saatchi Mobile.
But companies are at least getting more bang for their buck, with the “blanket approach in blindly distributing campaigns” now being superseded by more sophisticated targeting techniques, according to Saatchi Mobile chief executive James Hilton.
He added: “It is this sophistication that is playing a key role in driving up the cost of premium mobile inventory, while wholesale inventory in many areas remains low. Companies are now fighting to reach the same upper echelons because they deliver higher conversion rates and increased ROI. However, this has pushed inventory prices up.”
The focus on reaching high-value tablet users – particularly iPad users – has also pushed up costs. Inventory is still low and networks and publishers are not decreasing rates as inventory levels increase, since the platform is delivering strong results for advertisers.
“The rise in cost is also indicative of the growing maturity of mobile advertising generally in the wider media landscape,” added Hilton. “The only way to get the lowest advertising rates in today’s market is to have the scale to buy media in a big way and to buy it globally. Smaller media buyers simply don’t have the muscle to win on price.”
