Mobile advertising is undervalued – 52% of conversions are driven by mobile ads

Mobile advertising may play a much bigger part in digital media discovery and conversion than previously thought, according to a new study by Datalicious commissioned by Facebook. The study found that over half of conversions (52%) were driven by mobile advertising.
Combining the data from three Australian brands, the research noted that a people-based measurement approach was crucial in order to accurately assess touch points. Indeed, a cookie-based tracking approach resulted in the undervaluing of almost 40% of touch points.
According to the study, 45% of all customer journeys were exposed to ads across two or more devices in a people-based measurement approach. For a single person, there are on average three cookie paths that lead to a conversion. However, in a cookie-only approach there were just 29% conversion for mobile-only journeys compared to 71% on desktops.
Andrew Newell, GM of Business Development at Datalicious says:

“The biggest surprise for us is that on average there [were] three cookies for one person. If you’re using traditional measurement, either last click or cookie-based attribution, you’d be missing out on the bigger picture because only one of those cookies would be credited with conversion.”

Importantly, mobile offers a more cost-effective channel for advertising. Whilst advertisers spent a total 27% of their total budgets on mobile, the return on investment was 1.9x that with mobile contributing to an average 52% of conversions.

In addition, mobile ads were found to influence the purchase path by shifting consumer attention from passive to aware to intent states. Desktops are also playing a more critical role during the final stages of conversion.  In a cookie-based measurement approach, desktop devices appear to be crucial. That means, mobile may be the better option to initially reach consumers and turn passive customers into active ones who show intent to purchase or act. Desktop then provides the better path towards a final purchase and to close the journey.

The study argues that the people-based attribution model offers a more accurate assessment of channel effectiveness. When focussing solely on cookie-based evaluation, some channels remain undervalued. Ultimately, that means credit may be misspent due to inaccurate measurement choices.

Overall, display may provide the best starting point to initially reach consumers, followed by Facebook to turn passive prospects into active ones. Facebook is also a great way to initiate purchases, whilst search ranked highest for closing a consumer journey.
The research has apparently already had an influence on the three clients Telstra, Foxtel and Medibank as they prepare to boost the role of mobile advertising. Justin Robinson, the Director of Marketing Operations at Foxtel, told AdNews:

“It makes me question the value of some of those desktop based brand placements that are quite broad in reach – such as a homepage takeover on one of the main masthead websites. It has also given us better clarity around where we are spending our money, the ROI of each channel. Instead of the typical creative or media brief where we start with the script in the TVC, which is often the way it works, we flip it on its head now and start with the digital plan because it’s more targeted and we understand the ROI better and build it out from there. So what’s the role of broad reaching media like outdoor or television? It will sometimes come last in the plan perhaps.”

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