It’s well-established that despite digital’s rise over the past decade, spend on online ads is still disproportionately lower than where it should be in theory.
While there’s reason to believe that spend will catch up, the shift of budgets to digital isn’t coming fast enough for many publishers and ad networks — something that is becoming particularly noticeable when it comes to mobile and video.
According to a survey conducted by the Association of Online Publishers (AOP), the top inhibitor to monetization on mobile devices is agency attitude towards mobile. A majority — 55% and 52% — of publishers the AOP polled as part of its AOP Content and Trends Census 2012 indicated that ad agencies are the biggest impediments to their ability to generate revenue from mobile and tablet users, respectively.
A related problem flagged by publishers: for mobile devices specifically, a majority believe that many agencies are far too dependent on low-yield ad networks which generate less-than-optimal revenue to publishers.
Similar concerns about agency attitudes and priorities are apparent in the online video space. Online video has exploded in the past several years and purveyors of it are hoping that rapid growth will start to bring TV-like dollars to the space.
In an article published this weekend, paidContent’s Jeff John Roberts quoted Matt Minoff, the CEO of online video ad network Selectable Media. According to Minoff, there simply aren’t enough ads and agencies are part of the problem. “What holds back advertisers from taking advantage of new platforms is that they have to repurpose creative built for TV. They’re utilizing 30 second TV spots online and for mobile,” he stated.
Are agencies really to blame?
While there’s little doubt that ad budgets will continue to shift online, it’s debatable whether the pace at which this shift has been taking place is really something agencies should take the heat for.
Yes, demand for content on mobile is growing, as is the demand for online video. Yes, publishers are investing more in both. And yes, advertisers will eventually need to invest more in these channels if they want to reach consumers. But this isn’t an ‘if you create the inventory, they will pay’ proposition.
The fact that more mobile and online video ad inventory is on offer doesn’t necessarily mean that agencies should be scooping it all up. Agencies work for their clients, not for publishers hoping to recoup their investments in mobile and video content. While there is certainly a role for agencies to play in making sure these mediums deliver, publishers will also have to do more than complain if they really want to cut into the $130bn per year pie that is television ad spend.
If publishers and ad networks, for instance, want agencies to get behind mobile, they’re going to have to help solve some of the challenges. And if they’re going to ask agencies to move beyond repurposing existing ads and develop new native digital ad formats, they need to convince them that the investment will pay off. The publishers and ad networks that do that will be successful; the ones that don’t will always be disappointed.