The Mobile Marketing Platform Problem with Programmatic

Mobile is indisputably the next big marketing platform. As eMarketer predicts, US mobile programmatic ad spending will reach $9.33 billion by the end of this year and account for 60.5 percent of total US programmatic display ad spending. Moreover, mobile usage has surpassed desktop in the US: Sixty percent of activity on digital platforms occurs on smartphones and tablets, according to comScore.

So why is mobile user experience still so terrible? It took the Google “Mobilegeddon” to get many large brands to really concentrate on improving their mobile experience. Why did Google have to enact such a steep penalty on sites with poorly performing mobile experiences to get them to pay attention? Honestly, I think it’s partly because crappy mobile UI equals a higher rate of display advertising return. Just like takeover ads that appear when a user visits a site on a desktop computer, or like 30-page slideshows that force you to reload pages over and over, crappy UI creates higher ad revenue, and that demotivates change.

Any marketing team member two drinks into happy hour will admit that much of mobile’s appeal is from high performance, or perhaps more accurately known as “people with fat fingers.” Because, let’s face it, when was the last time you intentionally clicked on a display ad? Most mobile ad clicks are a mistake; you’re juggling a coffee while trying to browse Boston.com, and you accidentally click a giant ad while you’re trying to scroll. As Smart Insights reported in April, across all ad formats and placements, ad CTR amounts to less than 1 click per 1000 impressions. Clearly, these are not the kind of numbers to write home about. It’s far easier to avoid ads with a mouse than when they fill your phone’s entire screen, so naturally, any brand is going to prefer the medium that gets the most clicks.

What about Facebook’s Mobile UX?

The cutting-edge hipsters of the technological world don’t like to give Facebook kudos, ever; it’s like rooting for the Empire when you watch Star Wars. Despite the fact that Millennials view Facebook as an old-person social media tool (anything that has your grandma on it can’t be that cool), even the most jaded startup-ophile will tip his hat to Facebook for its excellent mobile UX / ad experience that relies on in-feed placements. Facebook is seemingly one of the only brands that actually cares about the mobile experience. The social media platform’s huge reach is causing much of the mobile ad’s rise in programmatic ad buying. As eMarketer states, with Facebook’s US mobile revenues expected to total $5.89 billion this year, and expected to reach $10.32 billion by 2017, it’s clearly doing something right.

The question is, would Facebook still be making this kind of revenue even if it didn’t give a hoot about mobile UX? All signs point to yes.

The Nielsen Norman Group, an evidence-based user experience research company, has an excellent article that outlines the lag in mobile design behind desktop, discussing how mobile has been lurching through trends and hitting dead ends in the process. For example, flat design with its minimal iconography, hamburger menus that hide lists of options for a less cluttered screen, and infinite loading, which allows for content to load in chunks for a smoother experience. Each of these changes has its pros and cons, and over time, Web developers are getting better at melding these techniques together to improve the overall mobile experience. In the meantime, as mobile design improvements moved in fits and starts, our fat fingers have remained steady, showing a consistent stream of clicks on mobile display advertising no matter how terribly they’re presented.

Mobile display advertising is a huge part of programmatic ad spend, and it’s an easy way to hit a growing audience without having to micromanage. Increasing marketing platform sophistication with automated, machine-driven ad buying is making the mobile display market an easy place for ad agencies to dump budgets and report back to their clients with glowing performance charts.

So, we’ve identified part of the problem: There’s no motivation to get better.

What Will Become of Mobile Programmatic?

We’re at a point where mobile UX is “good enough,” and at the same time, programmatic ad buying is becoming increasingly sophisticated in its targeting. There are not that many places left for display ad spends to go. There’s video, but it can’t grab the whole pie. As long as agencies can show a nice graph to their clients, this portion of their ad spend will remain stagnant.

Eventually, good enough won’t cut it. Programmatic targeting will slow until the numbers are too small to eat up enough budget. The positives of mobile ad blockers—saved time, saved money, saved battery power, and increased Web-browsing privacy—will continue to add to the number of mobile ad-block users (just ask The New York Times). More mobile ad blockers will scare away the advertisers who target tech-savvy users, which drives much of the appeal of targeting mobile in the first place. And then, there are the hidden costs of programmatic, as Ad Age points out: “expensive engineers and traders, data-management platforms, research and development, and more.”

So if ad spend isn’t being poured down the mobile display ad drain, where will brands allocate these funds?

Video will be the next marketing platform golden child—eMarketer predicts that US programmatic video ads will account for 40 percent of digital video ad spending in 2016 ($3.84 billion). But will users ever regard video ads as non-invasive? Doubtful. The people have spoken, and they want to take back control in the content they consume, choosing subscription models like Netflix, Hulu Plus, HBO Go, and many other on-demand services over interrupt advertising.

Mobile design will continue to evolve, because clunky display advertising won’t be able to stick around forever; not with an increasingly tech-savvy audience that will begin punishing those who don’t make changes.

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The Mobile Marketing Platform Problem with Programmatic