Mobile Monetization Is Now a Critical Imperative

When they are off-mic and off the record, most publishing executives are getting increasingly frank about the mobile conundrum they face. The math just doesn't look good. Oh, the hordes are here. Of that there is no doubt. It is not uncommon for top media brands to report exponential spikes in the share of traffic coming to them from mobile devices in the last year.

A couple of years ago, only the most mobile-ready categories of content such as ESPN and The Weather Channel were seeing 25% to 30% of their traffic coming from smartphones and tablets. That number is now commonplace, even among content such as magazine brands that don't have a natural mobile affinity.

All of this means that mobile has become a reflex, not just a complementary screen. For publishers, this could mean disaster. While most media execs will insist that, so far, mobile device traffic is "additive," at some point soon mobile will start cannibalizing desktop traffic. And that is where the math gets ugly. Analysts such as Mary Meeker warn that eCPMs (effective cost per mille) on mobile are 20% of desktop display. For traditional print and TV media, that microscopic number is even harder to swallow, since their digital properties had already represented a radical downsizing of CPMs. Compared to old media, the mobile monetization numbers look almost cruel.

The mobile conundrum for publishers is that, as Hearst Digital Media VP Grant Whitmore said at a recent conference, "A mixed bag is better than no bag." The arithmetic of mobile revenues is indeed scary. "The scarier thing would be to not have a rapidly growing mobile audience."'s general manager Rob Grimshaw actually warns publishers that some may face "catastrophic" consequences from not mastering mobile business models. He says a key hurdle is that much of the mobile money is already flowing or is most likely to flow to the giants: Facebook, Google, and Apple. Major media brands actually are coming late to the party.

Make no mistake: Mobile has changed quickly from an opportunity to a treacherous sea. But these are waters that publishers have no choice but to enter with aggressive ideas and policies. No silver bullets are forthcoming. But it is clear that publishers need to come at this problem from all sides.

Data is key. As The Financial Times Ltd. demonstrated when the company eschewed the Apple App Store for a web app version of FT, having control over one's own data is critical to extracting value from users. Apple was not ready to share enough information about visitors, and it was charging for a monetization platform that FT already had established online with subscribers. The brand discovered that apps do indeed work for them on other platforms when the revenue and data exchange are reasonable.

Banners, however, will not pay the bills. The massive amount of page impression inventory these mobile devices produce can only lead in one direction, a buyers' market. But that doesn't necessarily mean that highly interruptive, full screen, rich media interstitials are the best response. More so than on the web, ad experiences on mobile need to match the use case, audience, and content of the app or site.

Facebook and Twitter will need to leverage native formats such as sponsored stories and promoted tweets. But entertainment content such as celeb news and sports may explore interruptive interstitials and video spots. A recent survey of 60 rich media campaigns from Celtra, Inc. found widely varying engagement and response rates to video and direct response ad units according to the segment. Ad types have to be calibrated very carefully here.

M-commerce will be the story of 2013, so figure out what page you are on. Mobile is a portable point of sale. It is being used aggressively by prosumers to make and even fulfill buying decisions. Craft content that gets into the evolving purchase path, and get credit for that from merchants. But also get your existing e-shops into the smartphone and tablet catalog aggregators, or feature them on your tablet-ready webpages. Prime time is now swipe-and-shop-time in America.

Sell, sell, sell ... but not the same old stuff. Publishers do get a bit of a do-over on mobile when it comes to paid content. Creating personalized, mobile-centric value-adds will be key to re-establishing a paying relationship with customers that the internet broke. Don't expect the platform to justify charging for content. Every brand needs to earn back the paying customer by demonstrating that mobile is worth a special admission price.