Ad agencies slowing down mobile ad revenue growth

Channel News

Not just Facebook struggling to capitalise on mobile boom

Ad agencies are pulling back ad revenue growth on mobile platforms, despite the huge growth in smartphone sales.

A study by the Association of Online Publishers (AOP) found that advertising agency attitudes are one of the main reasons that revenues are not shifting to the new devices with the same speed as the public is buying them.

Just over half of respondents said that higher smartphone and mobile ad growth was not being attained because of agency attitude, higher than those concerned over a lack of audience, which amounted to 31 percent.  Dependency on low yield ad networks was also a concern, with 52 percent citing this as slowing growth.

The report found that there is still a long way to go for mobile advertising in terms of monetising increased traffic.  87 percent of publishers said that they derive at least 20 percent of their digital traffic from mobile users, while just a small proportion, 29 percent, generate over 20 percent of their revenues from mobile traffic.

At the same time there is positivity around the ability to grow revenues in future. 85 percent said that mobile devices offer the greatest opportunity for growth over the next year, with 62 percent aiming to optimise their portfolio for mobile use.

Lee Baker, director of AOP, says that the mobile ad market is likely to undergo some major changes as the industry struggles to adapt.

“We are going to see some fundamental changes to the mobile ad market over the coming year as ad agency attitudes catch up with publisher investment and mobile audience size,”  Baker said.