How much money should you be making from your mobile efforts? Results vary around the country, but metrics are emerging now. Scroll to to the bottom of the report for an Excel worksheet to plug in your own metrics based on these or your current estimates.
But first read through these metrics from Derrick DeCarlo, Vice President of Strategy and Development for LSN Mobile, a leading provider of mobile platforms and mobile training for the television industry.
1. Traffic metrics - 30% to 100% plus of web site traffic
Traffic from mobile sites varies widely with television sites doing the best. The most mature broadcast sites with a browser and one to three apps may run 50% on the low side to 100% plus of PC site traffic for broadcast sites.
Mobile traffic for broadcast sites has been higher than for newspaper sites - sometimes by 3 to 1 in the same market.
2. Traffic for APPS versus Waps - 60/40
For the more developed companies - ie with at least two apps per market - LSN says that traffic on mobile is fairly evenly split between WAPs (browser based mobile sites) and Apps, with companies that have full app programs (news, sports, weather) coming in at 60/40 Apps to WAPS. "Apps are on a faster growth curve, but WAPs are not going away."
3. Consumption patterns - Up from 5 to 6 pages per month per user to 15 to 20 pages per month per user
Another upward trend is heavier consumption per user; the average frequency of use of apps has risen from five or six pages a month two year ago to 15 to 20 pages a month per user in March 2012.
"They are not deep diving, but snacking," says DeCarlo. That is, they check often for weather or sports scores, but do not spend a lot of time reading or engaging beyond this, do the size of the screen and "on-the-go" aspect. Apps, in short, are utilities.
As such, mobile doesn’t replace traditional web or media. Users continue to log-on to traditional web sites and tablets to "read the news." Media usage itself is expanding with the additional options.
4. CTR's - 1.2% versus .1% for desktop views
Click through rates for mobile are nothing short of spectacular in comparison to desktop internet: Good campaigns yeild and average of 1.2% versus .1% for desktop banner ads. WAPS do slightly better - up to 2.5% - than apps on CTR rates, probably because apps have more pages per visitor, and CTR's trend towards numbers of visitors, in spite of the fact that WAP ads are lost when the visitor scrolls down, while app ads stay on the screen.
5. Pricing model - $10 cpm-based models, with $6 actuals
Because of the rapid growth in audiences, sponsorships are being replaced by CPM-based pricing. One way to price is to give the "main advertiser" - what used to be a sponsorhip - a guarantee of impressions, but still allows other advertisers to be included as the audience expands. Suggested starting pricing is $10 cpm, however since some large buys are bundled with larger traditional campaigns, actual CPM tends to float around $6 at sites we surveyed.
An example is Schurz-owned KY3 (an LSN client) which bundles 75,000 impressions for about for $500, with "half the traffic" of its weather app going to the "main advertiser" for $2500 a month.
Total flat price rates for local buys start at $500. However, broadcast sites selling weather apps will obtain $1500 to $2000 for some mobile efforts, with larger, shorter campaigns in the $3000 to $5000 range and a few campaigns are bringing in $15,000 to $20,000 on high traffic sites.
Targeted mobile ads can yield up to $15 CPM.
National ads on platforms such as Verve are paying as much as $4 to $8 cpm rates for premium local content, although split with the platform provider. LSN says its best clients have moved off revenue share programs and onto flat fee programs, "because it works out better for them. They capture more of the revenue and contain costs."
6. Other mobile products in the mix - Text alerts and SMS yield incremental dollars - and attract more banner advertising
Smaller, incremental dollars are coming from a variety of additional products. Text alerts continue to be sold on a $500 a month sponsorship model, in addition to sponsorships of smaller traffic alerts for things like high school football scores and school closings bundled with other media for incremental revenue gains.
SMS is also growing in popularity among high touch small businesses. Some LSN partners are running a dozen short code compaigns a month, including both text-back campaigns to support a specific short term promotion, allong with a few longer term programs in which reps help local businesses build their own opt-in lists.
Key categories for sms include retail, food, day care, business schools and legal. Packaging SMS with other products, such as the SOLOMO effort yield better results as they solve additional problems for merchants, such as being found on search engines.
7. Sell-through rates - 30% to 40% for experienced broadcast sites
Because of the hockey stick growth factor - and so many app and tablet launches - its hard to set a sell-through target. One best practice is to line up two advertisers before the launch - as "main advertisers" rather than sponsors - of a new app.
Television sites tend to sell-through their mobile inventory at higher rates. Schurz, for example, owns both television and newspaper sites, but 89% of the mobile revenue is from the television stations, even though there are more newspapers than stations. And stations bring in twice as much revenue per page view, in spite of having more pageviews.
Reasons include more and better promotion of the apps via related on-air broadcasts, separate and highly focused digital teams, more aggressive marketers in the broadcast space and the rapid adoption of lucrative weather apps, which newspapers have been reluctant to embrace. Radio can follow this model, with their own twists.
8. Who is buying mobile - Auto, Food, Banking, Cable, Health and more
The largest buyers of local mobile ads on the LSN platform is auto followed by food, especially fast food with muliple locations that appeals to people "on-the-go."
Banking, Legal, Education, Telecommunications, Comcast and Health are also top selling categories. Three top buys for Philly.com's mobile bundles were sold to Mainline Health, Comcast and WellsFargo.
Weather app advertisers have also included weather-related businesses including HVAC, weather-related sports like skiing, tires, roofs and so on.
Print companies also tend to sell more events and grocery stores - again picking off the low hanging fruit by leveraging existing relationships.
DiCarlo summarizes the ideal mobile advertiser: "Don’t look for somebody that is a good mobile sponsor, look for someone who is a good marketer."
He says a common thread is that these companies "may not have thought about mobile" but "recognize they need to change up their marketing mix" and that part of the value is changing "the perception of the business as old and stodgy."
For auto dealers, mobile provides differentiation. "They are always thinking, 'I need to do something that is different than my competitors" and reaching new market share before their competitors do.
DiCarlo says that on training calls, he has watched an advertiser check a score on their phone while insisting they don't understand how to advertise on mobile. "90% of people I meet with get that they need to be on mobile. They don't understand how, but they are listening."
The food industry has a special place in the mobile advertising universe because it is a daily, on-the-go, opportunity. "Less than 50% of the adult popultion knows what they are going to have for dinner at 5 p.m. If I can have my message in from of those users, I'm going to get some of them."
A McDonald's franchisee gave DiCarlo an even more compelling statistic, 60% of the purchasing decision for a QuickServiceRestaurant (QSR), as fast food restaurants are now called, are made in the last 30 seconds. A 7-Eleven chain in Honolulu outfitted its stores with scanners that read mobile phones, and offered a discount via mobile display ad. The program obtained the 1% click through as well as an outstanding 10.2% coupon redemption.
A note here: Not everyone agrees on how to sell the "on-the-go" market. Allen Klosowski, of Digital First Media, is working to develop predictive data on its users via mapping where they are at given times of the day, in order to sell "three to four hours ahead" of when they are going to be in an area, either work or home.
Don't forget the airport and cable. Airports often have significant money for new parking areas and direct flights. Xfinity has been placing serious buys in a number of markets. Finally, make mobile a component of your SIMPLE political packages - small, medium and large - ready to go for SuperPacs and upcoming elections. Political ads is the one category that likes to be associated with news.
A powerful new trend is selling custom apps to merchants. This fits well into the fast food area; and is supported by both onair and mobile online campaigns - the latter having the ability to "click to call or order" from the phone app.
9. Calculating the mobile opportunity - See worksheet below
To give an idea of potential, a market with traffic in the 460,000 to 1.5 million range for its mobile site and two apps, is pulling in about $130,000 its first full year, with that number set to expand. Use the Mobile Evaluation Worksheet attached below to estimate the local opportunity for your media company. Plug-in numbers include:
*Current and future mobile/website ratios
*Number of apps
*Incremental revenue from SMS and Text campaigns
Many thanks to Derrick DiCarlo, Vice President of Digital Strategy at LSN Mobile Communications for sharing these statistics and his expertise with us.
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