Nov 30, 2012

How good is the ROI on mobile advertising?

At my business, it's important to control costs and see benefits for the capital we spend, so I need to be reasonably confident that there will be a decent ROI for what we spend on advertising. Does anyone know any good and unbiased studies that show the effectiveness of mobile advertising, or even any personal experiences? Thanks.


I think that this is quite difficult to accurately determine.  I read a study a few month ago that posited something like 60% of the mobile ad clicks that occur are actually accidental.  I looked for the study, but couldn't find it again, so my number may be slightly off, but not by much if I recall correctly.  This fits my own experience with ads that are faux notifications, or pop up after a short delay right where you are about to click for another non-ad related purpose.  I suppose that there is still some value in simply getting people to your website, whether they intended the click or not, but I suspect it could also result in significant annoyance and be counterproductive. 


If you can figure out a meaningful metric, you can track your ROI, but it is a challenge.  Signups, where existing or potential customers provide contact info, are much more valuable than clicks or impressions to most businesses.  But how do you weight that?  It can be a bit of a black art.  If you can measure your organic sales, then compare sales over a period of test advertising, that can give a clue, but there are so many variables that it can be hard for a SMB to meaningfully measure the results.   

I suspect that it will depend on which platform you advertise on. iOS has a reputation for high value users that are willing to spend money on products, Android not so much.

You might do well to experiment in a controlled way. Set a limited mobile advertising budget, and see what the results are for each platform. That will give you an idea of what to expect, without you having to invest large sums of money.
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