Why Advertising on Mobile Sucks, From the Marketer’s Perspective
This TechCrunch article contains a graphic comparing eCPMS of desktop vs. mobile advertising:
TLDR version of this post: buying stuff on mobile is a terrible experience and fewer people do it than on the full-size desktop browser. Things you can buy easily (games, apps, content) is all cheap and single serve (< $10 per purchase).
Mobile & Desktop Impressions Are Not Created Equal
Advertising to a desktop browser is a relatively standardized experience, and you can assume the user has her full range of actions available at any given time (to see your ad as it was intended, to click, to buy, etc).
On a mobile device these assumptions fly out the window. There are multiple form factors of mobile devices, so you have to design collateral for all of them, test all of them, and you still can't be entirely sure your ad will look good or as you intended. So the view is messed up.
Then it gets even worse, with tons of accidental taps you're getting charged for because the advertising network places the ad in a place that is most likely to get tapped, even when the user has no interest in your ad.
The next problem is the marketer's own fault - the result of clicking through on a mobile ad is usually a terrible experience. Websites that aren't properly optimized for mobile, confusing landing pages, abrupt launches of the App Store with no context, mobile shopping carts that make me want to scream bloody murder and not trust for one moment with my credit card info.
And few do this well, so there isn't a gold standard to measure your own company's crappy experience against. Let's face it, most CMOs are not going to be the visionary to solve this usability problem - they're busy managing several other channels and a big investment here is very risky.
Why eCPMs on Desktop Advertising Remain Higher
At its simplest, the outcome of these differences is that eCPMs on the desktop are worth more because they a) are a more palatable user experience b) convert better and c) have greater competition among marketers trying to buy ad placements.
Beyond this calculation is the longer-term thinking marketing leaders generally employ when they consider various campaigns: the risk/reward ratio of any given channel.
If I am looking to build a new campaign, I can assume it will take longer to create the collateral and setup the keywords and other tracking needed for a mobile campaign than a desktop one - PLUS I probably have a lot of people on my team who are experienced and successful with desktop campaigns but would have a bit of a learning curve with mobile.
And this all assumes I have a mobile version of my website that is even suitable as a landing page for these ads. If not, there will be the additional work of creating new pages or optimizing the website. And don't even get me started on the shopping cart…
The Compounding Problem: Turtles All the Way Down
Stepping back from all this operational stuff for a second, we have to remember why marketers even buy ads in the first place. There are 2 main ways websites monetize - they either sell you products or they sell your pageviews to their own advertisers.
In the first case, they need to have some kind of shopping cart to capture the expected value of the impression they've just purchased.
In the second, they need to make their own mobile advertising experience decent enough that their own advertisers will pay MORE per impression on the marketer's own site than the marketer had to spend to acquire the traffic. And then their advertisers have the exact same problem.
I think value is only about one layer deep with mobile - you can't reasonably expect to resell your own filtered traffic to your own network when eCPMs at the first layer are already so low.
But If It's Really Hard and Few Are Doing It, Isn't That An Opportunity
If you can figure out how to provide a decent buying experience on your mobile site and/or a decent mobile advertising experience for your visitors (which your own advertisers are wiling to buy) then you are unique right now.
This knowledge is at the root of the gold rush to figure out how to make mobile advertising, and even entirely mobile-first businesses, work.
The company that can make the mobile traffic arbitrage opportunity more than one layer deep may well be the next Google. Until then, most marketers will continue to view this channel with trepidation and run small experiments rather than switch over their Adwords budget.