As part of our focus on mobile publishing and monetisation in the run-up to our Mobile Media Strategies 2013 event in September, we speak to a selection of expert speakers, starting with VG Mobile’s Tor Jacobsen.
The common adage when it comes to revenue streams for publishers is that you get print dollars, digital dimes and mobile cents.
But is there a way to make mobile advertising pay as well as, or even better, than online advertising?
VG Mobile, an offshoot of Norwegian newspaper group Verdens Gang, seems to have found an answer: a dedicated mobile team with sophisticated approaches to proving to advertisers that mobile works.
VG Mobile’s revenues, which come entirely from mobile advertising, have grown rapidly from 3 million Norwegian Krone (£337,000) in 2010, to Kr26 million (£2.9 million) in 2011 and Kr70 million (£7.9 million) in 2012. The company’s goal is to reach at least Kr125 million (£14.1 million) this year.
Given VG Mobile has 2.2 million unique visitors a week, those aren’t huge figures. But compare it to a leading UK news brand such as Guardian.co.uk, which made £14 million in total online ad revenue in 2011-2012.
VG Mobile operates in a country where there is a high level of smartphone adoption in Norway, and a healthy economy. However, VG Mobile managing director Tor Jacobsen tells us that there have been two interlinked secrets to the firm’s success:
— A single-minded focus on mobile and an emphasisis on taking advantage its characteristics
— Measuring the unique impact of mobile advertising.
Not thinking about much else
Jacobsen says that VG’s decision to set up VG Mobile as a separate company was key. At the very least, he says, publishers need to set up a dedicated mobile department:
Our team is only working with mobile, mobile sales, mobile editorial. They can make products that are perfect for mobile and a user experience perfect for mobile. You don’t have to think too much about print or web.
You really need to have a person who owns the sales – a mobile sales manager who is only interested in mobile. Either make a separate company where all the focus is, or you can have a department, but you really need to have people on sales and development who are focused on it and can really do the right things on it.
VG has set up a creative team and automated ad sales in order to “own the whole value chain”.
Measurement = proof
Jacobsen says VG has only been able to generate signficant revenues from mobile ads by proving to clients that they work – and can work better for campaigns than other forms of advertising.
That has involved a move away from metrics such as clicks or views towards measurements designed to get closer to the transaction the ads are trying to promote.
It’s very useful for us to go to retailers and talk about the effect on buying habits, because mobile is so close to the point of purchase. The next phase we are going into now is to really prove mobile as a place for brands to tell a good story.
Digital is based on the click, but for a lot of mobile campaigns it’s not relevant to what they’ve clicked on. They shouldn’t do an action on mobile, they are doing it in the shop. One of the problems (in mobile advertising) is we haven’t got good measurement yet.
In one case study, which Jacobsen says has been especially useful in bringing in new clients, supermarket chain Coop saw a 36 percent rise in sales of salmon after running ads at the end of the day only on the VG Mobile sites.
VG is in the process of setting up its own research platform to improve its metrics on mobile ad effectiveness – and thus convince more advertisers to stump up cash for mobile campaigns.
Bigger threat to print
Doing these things is vital, says Jacobsen, becasue mobile poses a huge threat to existing publishing models.
We think that mobile is a lot more dangerous for print than the traditional web has ever been. That’s because like print it is very mobile. You can use it anywhere. We need to be on the offensive in mobile.
Jacobsen will be providing further insight into what it takes to build a successful mobile ad business at Mobile Media Strategies on Septmber 26. You can find full details, including all the other top level executives scheduled to take part, here.