Mobile Advertising Performance Improves, Driven by Video

The Celtra mobile advertising report found noticeable growth in some key areas of mobile display ad performance, especially in video consumption.

mobile advertising and marketing

Mobile advertising performance rates in the first-quarter 2014 have stabilized for the first time since the second quarter of 2012, according to mobile ad technology provider Celtra's quarterly benchmark report.

The report found noticeable growth in some key areas of mobile display ad performance, especially in video consumption—video play rates for standard ad formats have stabilized at slightly above 12 percent and have increased by 38 percent for expandable banners.

However, the report also found video completion rates increased significantly across the board in the last quarter to 52 percent for standard formats and 77 percent for native formats.

"Video ads look especially promising. With an admirable lift in video consumption rates most noticeable in in-banner video formats, mobile video and display are quickly converging into one powerful and effective mobile ad product," Matevz Klanjsek, co-founder and chief product officer of Celtra, said in a statement.

Overall ad expansion rates for standard formats in Q1 leveled at just above 0.5 percent, slightly higher compared with the previous quarter.

Native formats and the Interactive Advertising Bureau's (IAB) Mobile Rising Stars ad formats continued to perform extremely well with 2.5 percent and 1.1 percent expansion rates.

The report also revealed that although the expandable banner is still the format of choice, fully interactive banner formats are catching up, especially in verticals like automotive, where more than half of all ads are banners.

"After two years of expected gradual decrease, the performance of ads has started to stabilize this year. With expansion rates at 0.5 percent, which is still more than 5 times higher than on desktop, this floor actually looks rather good and offers an optimistic outlook for mobile display advertising," Klanjsek continued.

The consumer packaged goods (CPG) vertical boasts the highest engagement rate at 13.9 percent and time spent on the ad unit at 10.1 seconds, while the most engaging ads came from the entertainment vertical, featuring a 0.69 percent expansion rate.

Ad engagement rates for standard ad formats remained steady at around 10 percent in the last few quarters, with CPG and travel ads continuing to generate highest engagement rates by vertical.

The benchmark study comes as a survey from mobile marketing agency Fetch indicated mobile can and should be used to increase in-store sales and become part of the traditional marketing mix.

Smartphone and tablet users appear to be increasingly open to receiving targeted advertisements, with 54 percent declaring that it is useful to receive mobile ads based on their smartphone's product search history, the report found.

Mobile ads that utilize GPS targeting allows for increased relevancy, with 45 percent more likely to click on a mobile ad that is applicable to their location.