Mobile Ad Format Pros and Cons: Where to Invest a Limited Ad Budget

April 3, 2015

As new digital ad formats surface in the industry, advertisers must adapt to the trends and evaluate new media channels to work into their budgets. The biggest issue with this is, what if there is no increase in budget quarter over quarter, year over year? Is there a way to still capture profitable traffic without breaking the bank?

Mobile ads already have a handful of ad formats that can be tested out, but can they be optimized? How will mobile search ads perform over mobile display ads? Mobile in-app ad inventory is widely available, but will they work for your audience? How will mobile run video ad networks? How will an offer wall perform compared to an in-app banner ad?

With so many mobile ad options to choose from, this blog post will focus on which mobile ad formats are best used for limited ad budgets. All ad campaigns, including traditional and online advertising, must have a specific goal in mind: branding or performance. For branding campaigns, these typically do not directly impact ROI, but raise awareness, and the main goal of the ad is to be seen, rather than acquire converting traffic. On the other hand, performance campaigns are measured and optimized to directly acquire leads or customers. So, because we’re working with limited budgets, this blog post will primarily be geared towards performance advertisers.

Here are just a few pros and cons that should be considered when investing in mobile ad formats.

Mobile Search Ads: Pros & Cons

Mobile Ad Formats

Pro: The smaller screens limit what the user sees, so they are more likely to click on the top result. Position 1 or 2 will get you more clicks.

Con: In order for your ad to appear in position 1, you may have to bid more. (However, currently, mobile ads are still less expensive on a CPC basis than regular paid search.)

Recommendation: For local advertisers, you might consider testing mobile search ads, as this could be a great way to gain some additional traffic and customers who are searching for storefronts or services nearby. Paid search is a proven advertising channel to acquire highly relevant traffic whereas display advertising isn’t as lucrative for local advertisers. However, upon launching your campaigns, make sure you’re bidding on long-tail keywords that include your city/location. Include this in the ad copy as well to weed out irrelevant clicks or impressions. Constantly monitor and track the performance closely, and don’t be afraid to shut these ads off if the performance is short of amazing.

For e-commerce or B2C lead gen advertisers in competitive markets, your limited ad budget may not be able to compete with the larger advertisers, so consider trying a different mobile strategy to ensure your ad budget is best spent on the highest quality traffic.

(MORE: Dynamic Remarketing Ads: The Future of Google Remarketing for E-Commerce Sites)

Mobile Display Ads: Pros & Cons

Mobile Display Ad

Pro: Mobile CPMs are $0.75, which is significantly cheaper than web display or paid search prices.

Con: The banner ad on mobile devices is harder to see on the small screen. With the tiny print, are your ads even getting the visibility you’re paying for? Additionally, studies have shown that up to 50% of clicks from mobile ads are accidental.

Recommendation: Whether you’re generating profitable returns from display campaigns already or just getting started, mobile web display, although cheap, has some serious cons that probably outweigh the pros, and does not suggest a compelling reason to test mobile web display when there are other types of mobile ads to try. Consider holding off for now.

Mobile In-App Ads & Offers: Pros & Cons

In-App Mobile Ad

Pro: You can acquire in-app traffic with highly customized pricing models such as CPC, CPM, CPV, CPA, or CPI. Additionally, there are a variety of ad formats you can work with such as banners, offers, videos, large full-screen ads, or rich media. As mobile ad inventory is also growing with the growth in mobile devices, this media channel is slightly cheaper than other online ad channels and you’ll reach sophisticated engaged audiences.

(MORE: AdWords Targets Mobile App Market with New Mobile App Promotion Ad Format)

Mobile Offer Ads

Con: As with any digital ads, figuring out the right targeting and creative that will entice users to click is an extremely time-consuming process that typically starts out with unprofitable ad spend to test.

Recommendation: Test out in-app ads while the inventory is still highly available and less expensive. Some of the popular mobile ad networks include AdMob, Flurry or Tapjoy. I’d recommend CPA or CPI-based bidding for performance advertisers on a budget. This way you only have to pay for specific conversion events that are directly tied back to your ad spend.

These are just a few advantages and disadvantages to consider when allocating your ad budget into mobile. As every industry and business is different, you can and should optimize mobile ads for your business. Have you had any successes or failures with mobile ads? What formats have you tried and how did they perform for you? Tell us in the comments below.

About the Author

This is a guest post by Jana Fung, the Marketing Manager of MixRank, a spy tool for online ads. With MixRank you can see exactly where your competitors are buying traffic and which ad copy is performing best for them across over 100,000 sites. Jana has managed successful marketing programs for over 6 years and has a passion for helping online marketers with their campaigns. If you’re a MixRank fan or just want to say hi, she’s interested in connecting with you! Follow her on Twitter: @jana_fung.

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