MOBILE AD RECEPTIVENESS, ENGAGEMENT, AND ACTION

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1 2014 MOBILE AD RECEPTIVENESS, ENGAGEMENT, AND ACTION

2 Overview Advertisements are an essential part of marketing. Through ads we can raise awareness, inform consumers, offer deals, and drive shoppers in store. However, despite the obvious benefits, past studies have shown that consumers often view ads as being intrusive, distracting, or possibly not even noticed at all. Mobile advertising is no different ask any consumer if they like ads on their devices and you will likely get a negative response. However, as consumers become more reliant on their mobile devices and ads mature to provide consumers with value in the form of relevant offers, time savings, free content, and discounts, we re seeing a positive and important shift in this perception. In fact, this year we found that consumers were 113 percent more likely to say that ads were informative/helpful than in With this improved value-offering from mobile ads, brands will continue to see an increase in ad engagement ultimately resulting in greater influence over their target audiences and a positive impact on their bottom lines. There are a number of trends contributing to this shift in the reception of ads. First, people are beginning to understand that in order for their favorite sites and apps to continue producing free content, they need revenue from ads. The vast majority of respondents said that they prefer a free website with ads over paying for an ad-free subscription. This sentiment has increased 31 percent since The other factor impacting feelings towards advertising is the design and content of the ads themselves. Rather than blasting a blanket message to multiple consumers, mobile ads are becoming more targeted and intriguing to consumers. Coupons and relevance are two of the biggest drivers for mobile ad acceptance and engagement. If a consumer finds an ad interesting or it can drive local action, they are most likely to engage. Location is an increasingly important ad relevancy factor for 52 percent of mobile users, up 44 percent over the last two years. Ultimately, the extent that consumers engage with an ad is a strong indicator of their immediate purchase intent so finding the right consumer and designing ads that are relevant to their location and needs, as well as offer them something in exchange, is key to peaking their interests and ultimately driving conversions. 2

3 Study methodology xad, and long-time partner Telmetrics, have collaborated with Nielsen for a third year of our first-tomarket mobile behavior study. The Mobile Path to Purchase research tracks consumers from initial purchase intent to conversion, while exploring ad effectiveness across key industries. This study contains online survey data from over 2,000 US Tablet and Smartphone users, as well as actual observed behaviors from Nielsen s Smartphone Analytics Panel of 6,000 Apple and Android users each group reporting that they had used their device to make a purchase decision in at least one of four key industries in the past 30 days. Respondent Totals Smartphone Tablet Entertainment Telecom Restaurant Auto n=1,814 n=1,346 n=1,043 n=756 n=962 n=718 3

4 Key findings Increasing reliance on mobile devices is accompanied by increased acceptance of ads As total time spent on mobile surpasses desktop for key categories, positive associations with mobile ads have risen 113% year-over-year year olds and users with high HHI are the most open to mobile ads These users over-index by up to 26% for both clicking and secondary actions post-click; they are also more likely to engage with ads through sharing on social media Secondary actions after viewing an ad are strong indicators of purchase intent Half of consumers who take action post-click want to purchase within the hour; 70% go on to make a purchase Location relevance, targeting, and deals drive ad engagement The importance of location relevance has grown 44% since 2013; relevance is especially likely to drive both clicks and secondary actions in older consumers 4

5 Acceptance of Mobile Ads

6 Year-over-year, mobile is becoming an increasingly important force in the path to purchase. Percentage of Online Time Spent with Select Categories by Device 6% 46% 51% 10% Increase In One Year Mobile PC 54% 49% Source: Nielsen Online panel, Nielsen Mobile panel, Nielsen ipad panel January

7 Increased comfort with smartphones and tablets leads to improved attitudes towards mobile ads. Feelings About Mobile Ads (% Agree) They are informative/helpful They are annoying/intrusive +113% -12% 22% 47% 63% 56% QCQ53: In general, how do you feel about mobile ads? 2013 (n=2042), 2014 (n=2001) 7

8 The group most receptive to mobile ads are the household decision makers with the greatest buying power. Agree that mobile ads are informative/helpful 37% 41% 51% 50% 57% 43% Age QCQ53: In general, how do you feel about mobile ads? 2014 (n=2001) 8

9 70% Of mobile users noticed mobile ads in the past 30 days. Entertainment, retail, and restaurants are the most common categories. Encountered Mobile Ads (past 30 days) Type of Ads Encountered (past 30 days) 70% Entertainment 39% Retail 35% 30% No Restaurants Travel 30% 34% Yes Banking/Finance Insurance 29% 28% Automotive Telecom 18% 23% Gas/Convenience 13% CQ54: Have you encountered any of the following types/categories of advertisements on your device(s) in the past 30 days? Smartphone (n=1814); Tablet (n=1346) 9

10 Consumers using their devices for larger-ticket purchases, such as telecom and auto, are more likely to notice ads. Nearly 40% of consumers using their device for an auto purchase notice mobile automotive ads. Noticed Mobile Ads (past 30 days) Noticed Ads Specific to their Purchase Category Using Device for a Purchase in Auto 83% Auto 37% Telecom 81% Entertainment 35% Restaurant 33% Restaurants 65% Telecom 31% Entertainment 61% CQ8: Have you used mobile apps or websites on your device(s) in the past 30 days to research information related to a purchase/transaction in any of the following categories? CQ54: Have you encountered any of the following types/ categories of advertisements on your device(s) in the past 30 days? Smartphone (n=1814); Tablet (n=1346) 10

11 Clicking on Ads

12 2 in 5 mobile users who notice mobile ads have also clicked on one in the past 30 days. Clicked on Ads (past 30 days) 57% 37% Yes No No Yes 43% 63% Smartphone Tablet CQ55: Have you clicked on any advertisements on your device(s) in the past 30 days? Smartphone (n=1243); Tablet (n=927) 12

13 Consumers who click on mobile ads rely heavily on their devices for purchases. Most Important Device for Purchases Smartphone or tablet 3% 1% 7% 6% 18% 7% 10% Other Print 34% 44% Television Laptop or Desktop Smartphone/Tablet 45% 41% Clicked on ad Did not click CQ55: Have you clicked on any advertisements on your device(s) in the past 30 days? Smartphone (n=1243); Tablet (n=927) 13

14 Consumers click on ads if they are relevant to their interests or their search. 2 in 5 consumers report clicking on an ad by accident. Reasons for Clicking on an Ad (Past 30 Days) 42% 44% 42% Accidentally clicked on an Ad in past 30 days Smartphone or Tablet 38% 27% 31% 40% It was relevant to something I was intrested in It was relevant to what I was looking for I liked the graphics/ animation Smartphone Tablet CQ56A,B: Please indicate all the reasons that you clicked on an ad on your <<DEVICE>> in the past 30 days. Smartphone (n=514); Tablet (n=336) 14

15 If consumers choose not to click on an ad it s because it s not interesting or relevant for them. 47% 43% Reasons for Clicking on an Ad (Past 30 Days) 38% 34% 21% 20% 15% 18% 6% 9% 2% 4% Wasn t intrested in the offering Wan t relevant to me Didin t even look at the ad I got what I needed without clicking Didn t want it to take me outside of search I didn t see a phone number on the ad Smartphone Tablet CQ57A,B: Please indicate all the reasons that you did not click on an ad on your <<DEVICE>> in the past 30 days. Smartphone (n=729); Tablet (n=591) 15

16 Secondary Actions

17 Nearly half of consumers took action after viewing an ad. Most common actions were visiting a site or looking for more info. Took Action After Viewing Ad (past 30 days) Action After Viewing Ad (past 30 days) 47% Visited advertised site Looked for more info 41% 38% No Considered buying product/service 29% Yes Used a coupon/offer Made a purchase 28% 25% 53% Visited a store/location Called the business 21% 18% CQ58A,B: You mentioned that you encountered an ad during the past 30 days on your <<DEVICE>>. Did you do any of the following after viewing the ad? Smartphone (n=1243); Tablet (n=927) 17

18 71% of consumers who take secondary actions are looking to make a purchase within the same day. Time to Purchase Smartphone or Tablet 9% 7% 14% 21% 21% 7% 17% 14% 25% 19% 25% 21% Took secondary action No secondary action Immediately Within the hour Within the day Within the week Within the month Longer than the month CQ38: Still thinking of this most recent visit/search on your Device, how quickly were you looking to complete the transaction/purchase? Took Secondary Action (n= 1,211), No Secondary Action (n= 576) 18

19 Consumers taking actions after viewing an ad expect businesses to be close to their current location. 16% 17% Expectations of Business Location Smartphone or Tablet 26% more likely than users who don t take secondary actions to expect businesses within 5 miles 36% 22% 49% 39% 18% 3% Took secondary action No secondary action Less than 1 mile Less than 5 miles Farther than 5 miles No expectations CQ21: When looking up information related to category on your Device, which of the following do you expect regarding the location of the business? Took Secondary Action (n= 1,211), No Secondary Action (n= 576) 19

20 Ultimately consumers engaging post-click are more likely to make a purchase. With no secondary action, users are still often planning to purchase in the near future. 70% Made a Purchase Related to Search Smartphone or Tablet 88% of users who took action post-click purchased or plan to do so in the near future 59% 18% 21% Took Secondary Action No Secondary Action Yes, i completed a purchase Not yet, but I plan to in the near future CQ40: And did you ultimately complete a transaction/purchase related to this research either in store, by phone, or online? Took Secondary Action (n= 1,211), No Secondary Action (n= 576) 20

21 Ad Preferences

22 Consumers are open to receiving ads in exchange for free content this sentiment is increasing year-over-year. Ok with Advertising if Can Access Content for Free Ad-Supported Site Preference 14% 27% 18% 28% +31% 23% I prefer a free website or app with ads I prefer a website or app without ads that I pay for 45% 59% 86% Agree Neutral Disagree CQ62: When looking for something related to the categories you recently shopped for, do you prefer a free website or app with advertisements or a website or app without ads that you have to pay for? Total (n=2001) 22

23 60% of consumers at least occasionally share ads on social media this is especially true for year olds. Sharing Ads on Social Media 44% 37% 31% 37% 44% 59% 28% 12% 16% 28% 18% 17% 29% 24% 16% 36% 19% 9% 36% 15% 5% 35% 6% % I never do it I do it rarely I do it regularly I do it very often CQ62: When looking for something related to the categories you recently shopped for, do you prefer a free website or app with advertisements or a website or app without ads that you have to pay for? (n=420), (n=711), (n=671), (n=637), (n=400), 65+ (n=321) 23

24 Local relevance is becoming increasingly important for mobile ads. Like Ads with Geographically Relevant Information 31% 19% 29% 34% +44% 36% 51% Disagree Neutral Agree 2014: CQ59A: When it comes to advertising on your <<DEVICE>> in general, how do you feel about each of the following? 2012, C25. When it comes to advertising on your <<INSERT DEVICE>> in general, how do you feel about each of the following? Total (n=2001) 24

25 Coupons grab the attention of younger consumers, local relevance becomes increasingly important with age. Top Types of Ads Most Likely to Click On 33% 31% 31% 26% 25% 27% 26% 28% 22% 22% 16% 13% 17% 17% 14% 13% 13% 16% 14% 14% 14% 14% 15% 10% Offers a coupon/promotion Is locally relevant to me Doesn t take me out of the app/site that I m on Features a brand I know CQ60A: When it comes to mobile advertising on your Smartphone, what kind of ads are you most likely to click on? (n=420), (n=711), (n=671), (n=637), (n=400), 65+ (n=321) 25

26 Coupons and relevant targeting also motivate consumers to take further action. Top Types of Ads Most Likely to Lead to Action 37% 41% 39% 41% 33% 31% 32% 31% 21% 22% 21% 24% 26% 9% 16% 9% 15% 12% 16% 9% 18% 9% 12% 8% Offers a coupon/promotion Targeted to what I was searching A familiar brand Is within driving distance CQ61A: When it comes to a mobile ad on your smartphone, which of the following would most likely motivate you to take action (such as purchasing a product/service, visiting a location, etc.)? (n=420), (n=711), (n=671), (n=637), (n=400), 65+ (n=321) 26

27 Convenience, location and contacting a business are strongly tied to mobile engagement. Consumers who engage strongly prefer close businesses and easy access to contact info. Ad Preferences 66% 67% 62% 69% 57% 61% Like Ads That Don t take me out of the Site/App Like Ads that Are Geographically Relevant Like Ads with Direct Phone Number for the Business Clicked on Ad Took Secondary Actions CQ59B: When it comes to advertising on your <<DEVICE>> in general, how do you feel about each of the following Clicked on an Ad (n= 1,184), Took Secondary Action (n= 1,211), 27

28 Mobile Ad Engagment Profile

29 Apple users are slightly more engaged with mobile advertising than Android users. Operating System Total 48% 44% 8% Clicked on an Ad 45% 48% 7% Took Secondary Actions 44% 47% 8% Android (Google) ios (Apple) Other 29

30 25-44 year olds over-index for both clicking on ads and taking action after viewing ads. Demographics Indexed Against Total Mobile Users Clicked on Ad Took Secondary Action Male Female Age

31 Higher income, Black, and Hispanic users are also more likely to engage with mobile ads. Demographics Indexed Against Total Mobile Users Clicked on an Took Secondary Action Less then $50K $50K-$100K $100K-$150K $150K White Black Hispanic Asian

32 Conclusion

33 Conclusions As mobile surpasses desktop in total usage time in key categories, positive association with mobile ads is also on the rise. In fact, the number of consumers agreeing that mobile ads are informative and helpful has seen triple-digit growth in the past year. As users continue to consumer media on mobile and turn to their devices for everyday activities, marketers are learning ways to reach them with relevant and targeted messages. This increased value is leading to a significant increase in receptiveness to mobile advertising. Secondary actions after viewing an ad, such as visiting a website or store location, are strong indicators of purchase intent. Consumers who not only click on an ad, but also engage post-click have more immediate purchase needs, closer expectations of proximity, and a higher likelihood to convert. The frequency of these post-click activities is therefore a great measure of campaign success. Encourage secondary actions by creating relevance for the user through location and context. In past studies, we ve seen that Millennials tend to be early adopters of technology. While it s still true that young consumers drive much of mobile behavior, the group that indexed highest for clicks and secondary actions was ages and at income levels above $100K. These older users see the value in mobile advertising and are especially motivated by relevance. This is good news for brands looking to connect with these heads of households with significant disposable income. 33

34 For More Information: About xad About Telmetrics About Nielsen xad helps brands harness the Telmetrics is a leading call Nielsen Holdings N.V. (NYSE: power of accurate location data measurement technology NLSN) is a global information to produce measurable results company that powers mobile, and measurement company from mobile advertising. Through digital and traditional marketers with leading market positions award-winning location technology use of calls as a cross-media in marketing and consumer that is precise, measurable and advertising performance metric. information, television and scalable, xad s platform pinpoints For nearly 25 years, Telmetrics other media measurement, target audiences by neighborhood, has delivered scalable and online intelligence, mobile across the country and around quality call measurement measurement, trade shows and the globe at pivotal moments innovations that reveal the related properties. Nielsen has during the consumer s path-to- lead generation impact of a presence in approximately 100 purchase. xad s platform drives direct response ad programs. countries, with headquarters in results powered by search- As a proven global technology New York, USA and Diemen, Additional study details and findings can be found at MobilePathtoPurchase.com. For questions or to provide feedback, please contact us at or enhanced targeting, ultimately yielding unparalleled performance. Founded in 2009, xad serves more than 1.5 million national and local advertisers, while managing more than 40 billion location-verified ad requests monthly. Connect with xad at Facebook, partner, Telmetrics helps media publishers, agencies and the leading brands in local, mobile and vertical search leverage calls for millions of SMB and national franchises ad performance and monetization models. For more information, the Netherlands. Twitter and LinkedIn. please visit Telmetrics.com. 34

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