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Has Programmatic Saved the Banner Ad?

David Murphy

M's Law Banner AdThe latest IAB/PwC ad spend figures released today reveal, once more, the seemingly unstoppable rise of mobile advertising. In the first half of the year, mobile racked up £707.1m of advertising revenues, 68 per cent up on the corresponding figure for H1 2013. If last year’s pattern is repeated, where the total 2013 ad spend was 2.3 times the H1 figure of £429.2m, then we are heading for a total UK mobile ad spend figure for 2014 of £1.65bn, which would be a 60 per cent increase on the total figure for 2013 of £1.03bn. It would also be 43x the 2009 total of £37.6m, and 3x 2012’s figure of £526m.

Mobile now accounts for 20 per cent of UK digital ad spend – a year ago, the figure was 14 per cent. And of the £396m spent on advertising on social media channels, 53 per cent (£209.7m) is accounted for by mobile, reflecting (though slightly less than) the proportion of ad revenues that Facebook and Twitter see coming from mobile channels.

Doubtless much of the growth revealed in these figures, and growth still to come, will come from advertising on social media channels delivered on mobile devices, and not just from Facebook and Twitter, but from the myriad other social networks out there, as the medium diversifies and new channels emerge that cater for the way different groups of people want to interact socially, whether that’s via photos, short videos, self-combusting messages or something else still to be thought of.

Native advertising
There’s doubtless massive growth to come also from native advertising on mobile (and desktop) devices. The IAB/PwC figures break out native (actually “native and content”) advertising for the first time in these results, and according to the figures, it accounted for £216m of advertising spend in H1 2014, including “paid-for sponsorships, advertisement features and in-feed distribution”. Already, this represents 21 per cent of digital display advertising and if that figure does not hit at least 30 per cent for the full year when those results are out I will be surprised.

Sadly, the stats do not break out the amount of spend on mobile or online accounted for by programmatic buying. Maybe this is something the IAB should try to address next time round.

Overall, the figures will please those in the mobile advertising business who are getting a bit tired of the naysayers telling them that mobile ads don’t work, that they are too intrusive and that the whole subject needs revisiting and reinventing. In fact, given the growth, if you assume that those spending the money on mobile ads will only continue doing so for as long as they deliver results and ROI, then clearly, something seems to be working.

It’s the humble banner ad, of course, which gets most of the grief where mobile advertising is concerned, but given the rise of programmatic, I wonder if rumours of its death may have been exaggerated.

Someone put it to me recently that in the world of algorithm-driven, machine-bought, programmatic inventory, what matters most is not where the ad appears, but that it appears in front of the right people, however unlikely it may seem that they would be found on the site or in the app where the ad appears. To put this in context, the same person told me a story about an airline enjoying great success with a programmatic campaign for flights to a US city. I forget which city, but let’s say Atlanta. When the results of the campaign were analysed, the media agency found that the most successful placement over a number of days had been on a dentistry website, the post-event rationale being that the city in question was hosting a huge dentistry conference, so for a given period, dentists were the hottest prospects for flights to Atlanta.

Which makes me wonder if, in the programmatic world, the creative treatment might also be of much less import than the key factor for success - that the right people see the ad. If that’s the case, there could be plenty of life in the banner for a good while yet.

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