Over half of all mobile media buys are programmatic, yet marketer understanding remains low

Over half of all brands are buying mobile inventory using programmatic media buying technologies, despite less than half (45 per cent) understanding how such technologies work, according to research by the Internet Advertising Bureau (IAB).

The trade body today (13 January) published a study delving into two of the most buoyant sub-sectors in the digital advertising sector – both mobile and programmatic – finding that almost two-thirds (64 per cent) of mobile display ads are being traded using programmatic media buying technologies.

The study, conducted by Circle Research, quizzed over 300 marketers from the arts, finance, FMCG, retail, and travel sectors that spend significant amounts on mobile advertising, finding that 29 per cent of respondents claimed to have an “excellent” understanding of the discipline. This is compared to just over a fifth (22 per cent) stating they have a "poor level" of understanding.

However, the survey also found that understanding of programmatic advertising on mobile devices is one of the least understood mobile topics, with 45 per cent of respondents reporting having "no or little knowledge" of the sector – despite half of all mobile display ad buys being performed with this technology.

Speaking with The Drum, Mike Reynolds, mobile manager at the IAB, explained the apparent anomaly by claiming that the findings reflected the enduring importance of media buying agencies – this is despite widespread speculation over some brands' moves to take their media buying in-house.

"In a lot of cases the buying [reported in the study] will be through their agencies, so effectively they are outsourcing," he explained.

The research, which was carried out in December 2015, found that 79 per cent of the respondents said that mobile advertising is an important part of their organisation’s overall advertising strategy.

Reynolds also told The Drum that mobile ad spend is expected to increase in the next 24 months, with the majority of outfits accomodating this increase by shifting budget from other areas of spend, such as outdoor or TV, etc. In addition, he also explained how the trade body estimates that 80 per cent of mobile display ad revenue will be traded using programmatic media buying technologies.

"Many of the brands reported that this trend was being encouraged by senior management [within their organisation]," he said, adding that 38 per cent claimed the enthusiasm for mobile was "unlocking new budget".

However, challenges do remain with difficulties in tracking and restraints on creativity cited as barriers against increasing usage of mobile advertising, according to the findings.

Reynolds added: “It’s great to see just how far mobile has come in a relatively short amount of time and it’s even more exciting to see mobile on the agenda for so many advertisers in the UK.

"Interestingly, the results show that programmatic has established itself as an effective way of buying mobile media, however there is a clear disconnect between this buying technique and knowledge levels. Therefore, strengthening this knowledge base across the industry remains a top priority of ours for 2016”.

Ronan Shields

I cover digital media trading and martech for The Drum magazine, plus I write my own opinion pieces, I don't really commission them.

All by Ronan