Monetization Tug of War: Mobile Sites Vs. Apps | MMA Global

Monetization Tug of War: Mobile Sites Vs. Apps

by Tony Nethercutt, General Manager, North America, Mocean Mobile

According to a survey conducted by Nielsen in Q1 2012, the vast majority (79 percent) of U.S. Smartphone and tablet owners have used their mobile devices for shopping-related activities. During the 2011 holiday season, the top retail apps and websites combined – Amazon, Best Buy, eBay, Target and Walmart – reached nearly 60 percent of Smartphone owners. With numbers like these, it’s not surprising that mobile advertising budgets are constantly growing. And this upward trend isn’t likely to change over the coming years. For publishers, mobile brings with it a unique set of opportunities and requires a more personalized and well-targeted approach to effectively grow your business. Here are some key ways publishers can monetize their mobile advertising campaigns via mobile websites and mobile apps.
Can Mobile Websites Result in Monetization?
Mobile optimized websites can offer a variety of advantages to publishers, compared to mobile apps.
Because mobile websites work across multiple platforms and devices (e.g. iPhone, Android, Blackberry), they make it easier and more efficient for publishers to leverage a diverse range of existing technical capabilities, including hosting and support services, production processes and tools, access controls and subscription models.
There’s also a lower cost of development involved and it’s relatively easy to support and update dynamic content in real time, whereas mobile apps often require significant financial investment to support each mobile device (iPhone, Android, Blackberry), frequent upgrades to fix bugs and enhance their features and functionality. Another technical benefit that publishers can reap is the ability to leverage existing publishing commercial infrastructure, access controls and subscription models for existing websites. They also enable publishers to leverage existing hosting and support services.
By developing a mobile-optimized website, publishers can provide the best user experience for users with limited screen sizes and Internet connections. Rich media ads tend to perform far better in driving users to mobile websites. According to Nielsen’s global survey of multi-screen media usage, 74 percent of global respondents report watching video via the Internet (on any device), up four points since 2010, and over half of global online consumers (56 percent) watch video on a mobile phone at least once a month and 28 percent at least once a day.
But before you get carried away with serving up video ads on your mobile website, it’s important to understand the bandwidth limitations that come with the mobile web. Despite the introduction of new devices and faster networks, even 3G and 4G networks aren’t built to serve large video files or ads without some buffering/download time. That can result in users becoming frustrated and not returning to a desired mobile landing page that takes too long to download. What that means, ultimately, is less revenue per impression for publishers.
Despite some of these technical complications, it delivers a wholly immersive and creative media experience at scale for established brands, ad agencies, ad tech vendors and publishers. One example of a brand that uses rich media ads to effectively target customers is Best Buy. Using video, it offered users an opportunity to watch “exclusive” videos from the Consumer Electronics Show (CES).
Targeting capabilities can also be an invaluable tool for publishers when delivering campaigns – when executed well, this parameter can effectively generate awareness to the preferred audience for brands and advertisers. Using hyper local geo-targeting, mobile ads can precisely deliver a brand’s message, products and services to a more specific audience based on “where” users are located, “what” they are searching for, or “when” they are searching. This form of targeted advertising on the mobile web enables you to not only hit the areas where a company is located, but can also open new doors of revenue  for retailers, service providers, clubs, restaurants, cafes, theaters and any other businesses looking to create brand awareness in a city, DMA or state.
App Monetization Opportunities for Publishers
ABI Research found that overall revenues from mobile applications, including pay-per-downloads, in-app purchases, in-app advertising and subscriptions will reach $46 billion by 2016, more than four times greater than the $8.5 billion earned in 2011.These numbers offer a very compelling business case for why more publishers will leverage mobile apps to earn revenue from consumers.
It’s been seen in many industries, with the exception of video games, that mobile apps which are free to the public get far more downloads than ones with a pay-per-download fee. Most users have a reluctance to spend – even if it’s $1.99 or $2.99 – for a piece of content or an experience that may be subpar. But an upside of free apps is that they act as a “test” or “pilot” for users, and users will likely pay for extra features after using the app several times. As an app receives millions and/or billions of views and downloads – as we saw with Instagram – the opportunities for monetization increase exponentially. It’s likely what contributed to the photo-sharing app surpassing 40 million users before being acquired by Facebook.
In-app purchases are another interesting avenue for mobile revenue, as a majority of these purchases are made by high-level or power users of applications, particularly games. In January, mobile app analytics company Localytics found that 44% of mobile application users who made an in-app purchase did so after their 10th session in the app. Zynga’s hugely popular gaming app – Words With Friends – has done a good job of capitalizing on the exploding growth of casual mobile gamers. Users have the option to purchase in-app “tokens”, which they can then use for certain features, such as being able to disable in-app advertisements.  There are purchase options that go up to 1,000 tokens, which run $100.
With an estimated 8.6 million daily active users, Words With Friends users gladly pay a nominal fee to continue playing the “viral” hit.
Another factor to take into consideration is that mobile apps tend to compartmentalize the audience that is engaging with a brand. But that isn’t necessarily a bad thing. The demographic of an iPad app user may be very different from the average user that visits your mobile website, and you can leverage those differences if you understand them and make them part of your mobile strategy. To continue to capitalize on in-app purchases, mobile app developers—and the marketers they work with—must get non-power users interested in making purchases, and include in-app purchase options in applications besides games.
Whether it’s advertising or in-app purchases, tracking the performance of certain videos, rich media banner ads, articles and other dynamic content will help publishers gauge the content that sells the best. What types of actions are users taking on a day-to-day basis? When do they tend to purchase virtual goods? By understanding user behavior, publishers and app developers can create the proper logic within an app to optimize revenue return.
Looking Ahead
In a mobile market where new technologies, devices and trends are emerging at a rapid pace, there’s no guarantee that the decision you make today will be the right decision for you six or twelve months down the line. But if you fully grasp the unique benefits that come with mobile websites and mobile apps, and can identify the purpose and goals of your mobile strategy, you’ll be one step closer to monetizing your mobile and tablet inventory effectively.


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