Advertising mobile apps on TV

Posted on September 14, 2015 by Eric Benjamin Seufert

TV.OldSchool_061213

On September 10th, mobile app analytics provider Flurry (which was acquired by Yahoo a little more than a year ago) published some interesting data points around mobile app usage, one of which was surfaced by many mainstream media outlets: in the US, more minutes per day, on average, are now spent focused on mobile devices than televisions.

150910144002993

While this eventuality was wholly predictable — note in the above chart that minutes spent watching television has remained flat since Q2 2013, and indeed has remained flat since Q1 2012 — it’s nonetheless symbolic of an important shift in the way people (or, at least, Americans) consume content.

Which begs the question: if mobile is a larger platform, in terms of consumption, that television, then what role should television have in advertising mobile apps?

Mobile gaming studios such as Machine Zone, King, and Supercell have used television advertising to great effect. But those companies are large, with large balance sheets: some component of reaching a massive, saturation-level audience with a television ad must have played into the internal ROI calculus when considering the viability of those ads by those companies.

The line of thought in pursuing a massive television campaign in a large market surely held that if an ad can reach enough people, it can reach everyone — if the saturation threshold can be identified, then whether or not a campaign at that level will be profitable can be quantified. This dovetails with the fact that not every potential user of an app is reachable via mobile ads; some people can only be reached through television.

Of course, more targeted television campaigns can also be viable: in running its ad during the Superbowl, Supercell effectively targeted its key demographic at a time when many of them were 1) in a room with their (presumably) friends, and, more importantly 2) likely in a room with someone that plays Clash of Clans already. That kind of targeting — reaching a group of people that are physically together — simply isn’t possible on mobile.

While examples of successful apps advertising on television certainly exist, the question of how television actually impacted the growth trajectories of the most famous examples (Clash of Clans, Game of War, Candy Crush Saga) is difficult to answer; those games were popular (and making lots of money) before advertising on television began for them. Surely the games reached even more people and made even more money as a result of television advertising (assuming the smart people employed by those companies made rational and profitable decisions), but it’s unclear where the formidability threshold exists for reaping positive ROI from television advertising.

Television advertising introduces far more friction for mobile apps than does mobile advertising:

  • A potential user must remember the name of an app and search for it explicitly in order to download it after watching a television advertisement. With mobile advertising, a download is a mere click away;
  • CPMs for the most desirable television ad inventory in the US are cheaper than most premium mobile video ad inventory, but targeting for television is difficult, as is calculating return on spend. Growth in digital (including desktop) ad spend has outpaced that of television for the last few years because of this, and digital spending is set to eclipse television spending in the near future;

fti-ad-forecast-chart

  • The process of buying television ads almost necessitates the use of intermediaries, reducing the transparency of the transaction. Mediapalooza revealed how much big advertisers are wasting on agency kickbacks / rebates.

unnamed

 

Putting this all together, it seems that a number of conditions must be met in order for television advertising to make sense for any mobile developer, chief among those potentially being that the product being advertised is already a social phenomenon. If that’s the case, the list of developers for which television advertising could effectively be employed is probably quite small — possibly even smaller than the number of app developers that have actually used it at appreciable scale. This could explain why most appeals to experiment with television advertising can only ever muster the same few examples to justify it.