Choosing a Mobile Ad Campaign
What to Consider When Choosing a Mobile Ad Campaign: Premium vs. Performance Models
Even though it’s very difficult to tell now, it looks as though mobile advertising will follow the same path as online advertising. However, this wasn't always the case. In order to understand the parallels, you have to go back in time to the origins of both channels:
Posted on Jul 24, 2011 |
In the beginning of online advertising, when running a campaign on CPA basis, buying traffic was a very simple and basic process. Sites had so much traffic that they were practically giving ads away. On mobile, it was bit of the opposite. Since the site owners were already owners of online advertising sites they already had a lot of experience, so instead of giving away the ads the same way they did with online advertising, they are selling the traffic either on CPM or CPC but not completely on a performance basis.
There are two main differences between how premium and performance-based advertising; one being how premium advertising is sold, the other depends on the goal of the campaign. Premium advertising is sold per each impression, on a CPM basis, so all the risk is on the advertiser. You will pay regardless of the results of the campaign. The goal of the advertiser is more of a branding campaign, less of a performance campaign (i.e. if Coca-Cola wants to spread brand awareness, they wouldn’t be interested necessarily for users to enter their site as they are not concerned with receiving emails, etc. They do not want to directly sell you Coca-Cola on the internet), similar to a goal of a campaign that implements television ads, billboards, etc.
That is all changing today as larger name brands are starting to have more performance-based campaigns. Publishers started to see that they could not sell all of the traffic using only branding campaigns so they eventually started to implement performance-based advertisements on the mobile platform. If they can have more time exposed to their website, why not?
If you’re a brand and you have to determine performance vs. premium in terms of which is the right model to use, the main factor to take into consideration is the overall goal of the campaign. If you are a big brand, your goal will be much different than if you are a small or mid-size company that wants to sell a product, do ecommerce, build an email database, etc. to directly sell the product afterwards.
Companies both small and large are starting to make the switch from mobile CPM and CPC campaigns to performance-based models in their programs. In our own company, we work with a well-known brand who has made two campaigns with us. One completely focused on building brand awareness and the second, a performance campaign. They wanted users to click on a banner and end up on a landing page and then to play a game inside the URL. They are starting to use both. Again, it depends on the goal of the campaign.
On the branding side it is very difficult to measure the success of the campaign. If you look at the amount of clicks, you can see how many users click on the banner. There is no direct measurement for the amount of success.
As we look to the future of performance vs. premium, campaigns will be much more performance-based than branding-based. In our own company, we have developed and are running several performance campaigns on mobile, and we are betting on this to be the trend as we move forward. Advertisers have the money, and they want to make sure the campaign is succeeding. They don’t want to take the risk of making a campaign without having any kind of measurement. With the exception of the big publishers (Yahoo, MSN, etc.) who will still sell a lot of branding. A big name will want to be on Yahoo. This applies more to mid-level publishers. Mid- level publishers had a lot of branding campaigns, but are starting to see a decrease in in them are starting to receive the same customers, the same big names, but in performance campaigns.