Pontiflex's conclusion: "a large portion of mobile ad dollars are wasted." The firm argues that advertisers should look beyond traditional online ad units and measurement models.
"[T]he fact that most people say they click on ads by mistake more often than they do on purpose is particularly striking," said Pontiflex co-founder and CEO Zephrin Lasker in a statement. "If you are a mobile marketer, why would you run a cost-per-click campaign?"
At least in the context of mobile ads sold on a cost-per-click or cost-per-impression basis, this isn't entirely a surprise. Other companies in the mobile marketing business have said as much.
Peter Farago, VP of marketing at Flurry, a mobile ad metrics and advertising company, in a recent interview suggested that ads sold on a cost-per-click basis are not nearly as effective as other means of customer acquisition.
Neither Pontiflex nor Flurry are disinterested parties in this discussion. Pontiflex helps advertisers with cost-per-lead campaigns, meaning the advertisers only pay when a business lead is generated (a customer signs up for a mailing list or the like). Flurry offers cost-per-install ads to promote mobile apps.
But that doesn't necessarily invalidate the observations of those proposing alternative approaches, like Pontiflex and Flurry. It's entirely possible that mobile display ads are selling well and not working. The question is how long can such a situation continue? Perhaps until the next round of mobile ad company acquisitions.
Pontiflex's report isn't all bad news. The study's findings indicate that mobile ads work when presented in a way that viewers don't find disruptive. Survey respondents (71%) indicated a preference for ads that allowed them to remain in the app they're using (when tapped, the typical AdMob ad in a native iPhone application will prompt the app to quit and launch the iPhone's Web browser to display the ad). Respondents (63%) also expressed a preference for ads that allow them to sign up for coupons, deals, or newsletters.
Another positive sign for advertisers is that far more of those surveyed used free apps (95%), where mobile advertising is accepted, than paid apps (41%), where it may not be welcomed.
Mobile advertising has a bright future, to be sure, but it may be a future with a different dominant ad model.
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