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Mobile video is underpriced

News, 25 May 2015

NEW YORK: Mobile video is currently significantly underpriced, according to the head of the Mobile Marketing Association who advises marketers to look at locking into long-term ad buys at today's prices.

Greg Stuart, CEO of the MMA, told Beet.tv that the organisation's new research had shown that, relative to other media, mobile video was priced at about half of what it should be, as supply outweighed demand.

But that situation will not last for ever and he suggested that marketers might want to buy years of future inventory at existing prices.

"I've talked to publishers and media companies who have that inventory and they're very happy to do that deal," he stated.

The research he referred to was the Smart Mobile Cross Marketing Effectiveness (SMoX) study, the results of which argue that mobile should get "a double digit allocation of the entire media mix (not just digital".

Marketers could significantly increase their overall campaign ROI, without increasing budget, by simply adjusting mobile spend upwards, the MMA claimed.

Stuart pointed out that marketers are currently only spending around 3% of their total budgets on mobile advertising although "SMoX tells them very clearly they need to be at 10% to 15% today".

And when they get good at it, "that will move to 15% to 20%. And as smartphone penetration moves up, it's 20% to 30%".

The big brands already know all this, he added, citing names such as Walmart, Coca-Cola, AT&T and MasterCard.

But with that increased spending comes an urgent need for better measurement metrics.

"The big mistake we made for internet was that we let click-through become the defining measure for everything," Stuart said, "and yet anybody who has any intelligence about this knows that click-through means absolutely nothing for anything – it's the worst measure we could have come up with."

Accordingly the MMA is working to understand the appropriate KPIs for different marketing objectives and different sectors.

"We'll figure all that out … so that marketers are really able to measure the value they get," Stuart declared.

Data sourced from Beet.tv; additional content by Warc staff