IAB Mobile Numbers Are Wrong: Amobee Boss – UPDATED WITH PWC RESPONSE

IAB Mobile Numbers Are Wrong: Amobee Boss – UPDATED WITH PWC RESPONSE
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Liam Walsh, B&T editorial board member and MD ANZ of Amobee, has called into question the estimated numbers of mobile ad spend in Australia proffered by IAB as wildly wrong.

Speaking on a panel at Rubicon Project’s Australia Market Summit, Walsh (pictured right above) took issue with the numbers being bandied around at the conference for mobile ad spend, which the IAB put at $1.5 billion in calendar year 2015.

“$1.55 billion for mobile? . . . I don’t think it’s right. If you make an assumption about how much money Facebook is getting on mobile – let’s say it’s $300 million excluding small business, I just don’t see where the other $1.2 billion in mobile is,” he said.

“Even though I respect the IAB enormously, I just don’t think that number is right,” he added.

Walsh’s opinion carries some weight, having worked at Facebook in various agency facing roles from May 2011 through to March 2014, before a brief stint at Kenshoo and then his current role at Amobee.

The amount of money media agencies are allocating to mobile excluding Facebook is around 2-4 per cent of the total ad expenditure in Australia,” he said. “So it’s low by definition; there is not enough money going into mobile.”

Walsh admitted there were “a whole bunch” of reasons why ad expenditure was low.

“The formats suck, they’re in annoying places … measurement sucks because you can’t track some conversions. There’s a whole bunch of things that the IAB and Nielson and all of these people are doing to make stuff better.

“But it feels exactly the same as 1999: digital, back of the PowerPoint deck. Then Facebook in, say 2011, back of the PowerPoint deck. [Facebook] is the most pervasive platform that has ever existed and it was in 2011, but it still had customers not spending much money on it.

“It was the same stuff, the ads are too little: an investment director sat in front of our global something or other and said he would spend more money, but the ads are too small. Our response was, ‘How big would you like it to be?’ Because it was ridiculous, right?

“I am very confident the issue wasn’t any of those things . . . it’s just fear and change management. People don’t know how to do mobile very well.

Walsh argued that problems arose because internally, at a client a business case, it has to get signed off.

“You’ve got to ask for money. And a GM is going to ask, ‘What do I get for all these little mobile ads?’ The answer is they’re not really sure. We haven’t got muscle memory in how to do this well.”

Walsh went on to say that when you solve all of these individual problems and you go back to the customer and say, ‘We’ve solved all of those problems’ and they still don’t sign off.

“Why is that? Because they don’t know what to expect from mobile. It’s the third evolution of the same problem: it happened in digital, it happened in social and it’s happening now.

“Mobile will be huge, but it won’t be for many years and it will be in a different shape. I can’t think of any single thing that social did that made it a dominant force it is today.”

In response to Walsh’s comments, PwC’s Megan Brownlow has sent B&T the following statement:

PwC Executive Director Megan Brownlow would like to clarify that the estimates for mobile advertising expenditure include both search and display advertising, as outlined in the Online Advertising Expenditure Reports (OAER):

“Mobile advertising comprises General Display and Search expenditures and also includes mobile video expenditure.  Total advertising revenue is reported on a gross basis. The figures are based on participants’ data, industry estimates for Google’s mobile display and search revenues, Twitter’s mobile display revenues and Facebook’s mobile display revenues.” (OAER March 2016 p14)

Mobile search represents a significant proportion of mobile advertising expenditure, at 43% for calendar 2015 according to our model, she says. Additionally mobile  grew to represent 40% of general display advertising in Australia in 2015. Some industry players experience lower proportions of expenditure directed to mobile but given that Facebook reports 80% of its global revenues are from mobile (Facebook 4th Quarter and Full Year 2015 Results) it seems plausible that Australian industry players achieve a 40% average, equivalent to $1,550m in calendar 2015.”

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