Marchex Study Rips Mobile Display Ads: They Cost Too Much & Results Are Poor

Marchex (MCHX) release an in-depth study entitled: The Downside of Mobile Display Advertising; How Performance Advertiser Lose Big On Banners”

“This study, investigates the effectiveness of mobile display advertising at generating high quality customer leads and found that “advertisers who spend on mobile banner ads to attract new customers receive an exceedingly poor return on investment”.

Marchex conducted a study across several branded, national advertisers and six major mobile display ad networks.
The study found that advertisers can overpay by more than 10X to generate one quality customer call.Marchex, a mobile advertising company focused on calls, examined a set of advertising campaigns across six major mobile display ad networks. The goal was to investigate the immediate rate of return on banner ads and understand how well these ads performed in terms of getting customers to call a business from their mobile phones.

Researchers analyzed data to determine if impressions (ad views) and clicks, the measurement tools of banner ads, actually translated into real customers.

According to the study:

  • It can take an average of nearly 500,000 impressions to generate a quality phone call.
  • Mobile display advertising is significantly overpriced when it comes to acquiring new customers.
  • Clicks are not indicative of customer intent. This means there can be high rates of accidental clicks on mobile display ads.
  • Mobile display ad performance varies wildly. In one case, a campaign that got 1.4 million impressions did not result in one quality phone call.

“The findings surprised even us. The number of people clicking on an ad really had no direct bearing on how many new customer phone calls a business got,” said Chen Zhao, principal analyst for the Marchex Institute, the research arm of Marchex. “That ends up making mobile display a guessing game for advertisers who want these quality outcomes.”

The goal of these campaigns was one quality phone call in the form of an auto insurance quote, a cable TV subscription inquiry, a home services appointment, or a class registration.

Marchex found to get one quality call from Mobile Display Ads it takes 494,104 Mobile Display Impressions That Create 2,481 Clicks, which in turn generated 29 calls that result in one “high quality call, thereby costing $302 for the call if you pay$0.61 CPM For Mobile Display or $248, if You Pay $0.10 Per Click.

“Display advertising can work well on desktop to build brand awareness, and may work for brand awareness on mobile devices.”

“Yet for mobile performance campaigns, where the advertiser’s goal is to measure a quality outcome, the game changes dramatically.”

“In essence, advertisers end up paying excessively for campaigns with little to no return.””It is therefore imperative for advertisers to manage and track real consumer outcomes from their mobile ad campaigns. ”

“Deep analysis must be performed in order to understand how to optimize advertising on mobile. And if advertisers continue to invest in mobile display, they should measure returns based on consumer actions – not impressions”.

Comments

  1. Louise says

    Thanx for the heads-up about the Marchex study. I download all the mobile consumer behavior studies I can find. The industry is still in its infancy, so the studies are just coming in. That is why Marchex encourages advertisers

    to manage and track real consumer outcomes from their mobile ad campaigns. Deep analysis must be performed in order to understand how to optimize advertising on mobile. And if advertisers continue to invest in mobile display, they should measure returns based on consumer actions – not impressions.

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