William Edwards Deming once said “In God we trust; all others bring data”1 and how true that statement rings in the world of mobile advertising. Data underpins many decisions that app developers make when figuring out how to monetize their apps while sustaining a stellar user experience.
What’s all the fuss about data anyway, you might ask? For starters, advertisers pay significantly more money to app developers who can provide accurate data about their users. Looking at the Smaato platform, the eCPM for mobile ad impressions without data rose 42% year-over-year from 2014 to 2015. During the same time period, however, ad impressions that passed data saw eCPM rise by 120%. Without hiring a mathematician, we can conclude that apps with data deliver almost three times higher eCPM growth. Not too shabby.
According to Nielsen CEO Mitch Barns (@MitchBarns), who knows a thing or two about the industry, data may prove to be the savior of advertising.2 Barns argues that accurate data delivers more “precision” which minimizes waste—less advertising directed at people who aren’t interested and simply won’t respond.
So we know that high-quality data facilitates audience targeting, which allows advertisers to deliver relevant ads that encourage meaningful user actions. With data, publishers can have confidence that the ads shown to their users meet the triple crown of engagement (and they’re less annoying, into the bargain):
Recent activity on Smaato’s mobile advertising platform illustrates that data is growing in importance all the time. Publishers who provide reliable data—such as location, gender and/or age—generate significantly more mobile ad revenue than publishers that do not pass this information.
For example, mobile ads with ZIP/Post Code data generated a 74% uplift in eCPM and those with GPS coordinates saw a 162% uplift. Gender data also provides a generous bump in eCPM for app developers, ranging from a 115% uplift for ads with male data and 177% uplift for those with female data. Women are simply more valuable to advertisers and publishers—sorry, guys!
We also see substantial eCPM gains for mobile ads that leverage age data, most notably in the 18-24 category where such data delivers an impressive uplift of 170%. But age data isn’t just for millennials and Gen Z types. Users in the 64+ age category show 127% increase in eCPM when age data is used to deliver ads relevant to an older audience.
Looking at the advertising industry more broadly, you could argue that everybody in the app ecosystem benefits when data is passed:
- Advertisers reach their target audience with less waste
- Publishers enjoy more revenue from happy advertisers
- Users see more relevant and engaging ads
In summary, it’s clear that leveraging data in the ad ecosystem and targeting the right ads to a receptive audience drives tangible – dare I say “data-driven” – results. While the benefits of passing data are numerous, it’s only fair to acknowledge that this isn’t always possible in every instance. In some cases, data is either incomplete or missing entirely and these ad campaigns will carry on regardless.
While the proliferation of data continues to gain pace, many decisions in advertising (and other industries, for that matter) are still made in the absence of data. When this is the case, former Netscape CEO Jim Barksdale has a telling perspective: “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”
Even with the widespread presence of data today, the scenario Jim describes still happens…but surely having access to data should be the rule rather than the exception!
2 How More Precise Data Science Will Be Advertising’s Ultimate Savior