Mobile Viewing Takes Off, but Marketers Are Slow to Get on Board

NEW YORK (TheStreet) -- The eyeballs are there, but the marketers have yet to follow.

Mobile devices accounted for 42% of all online viewing in the first quarter, and that figure is likely to surpass 50% by the end of the year, according to Ooyala, a video analytics firm that counts Comcast's (CMCSA) NBC/Universal, Disney's (DIS) ESPN and Univision among its clients.

Yet even as mobile viewing overtakes desktop and personal computers, marketers are balking at spending more of their advertising budget on mobile, said Sorosh Tavakoli, who oversees Santa Clara, Calif.-based Ooyala's advertising technology business. 

"While there's a ton of growth in mobile viewing, the monetization is still lagging," he said. "Mobile is behind PC and laptop; it's just not as sold out."

Mobile's ascendancy has relegated the tablet to a niche device.

Viewing on mobile is four times larger than tablet, according to the Ooyala study.

Yet taken together, mobile and tablet viewing increased 100% in the first quarter from a year earlier and 367% over the past two years, according to Ooyala.  

Yet, marketers remain wary. Some of the barriers are technical, Tavakoli said, explaining that major brands aren't always satisfied with how a video package plays on a mobile device compared to desktop.

Some of it is historical, said Warren Zenna, managing director of Mobext, the mobile arm of Havas Media.

Large brands have been buying online advertising on desktops and PCs for as long as 20 years, and there is an institutional resistance to getting them to shift their spending habits.


"There's organizational, operational inertia that gets in the way," Zenna said.

Furthermore, mobile advertising isn't seen as being as effective as desktop at prompting purchases or actions that leads to a purchase. 

More often, mobile is used to complement a larger advertising campaign, said Deacon Webster, head of creative at Walrus, a New York digital-advertising agency.

"Marketers look at mobile as a location-based play rather than fitting into people's lives in the way that it is," he said.

"It's advertising completely focused on where you are, say if you've entered a store. It's seen as a specialty piece of the media plan rather than a meaty, general chunk of it," Webster said.

The losers in marketers' reluctance to embrace mobile are online publishers and to a lesser extent, broadcasters, Tavakoli said. 

"Media companies, the broadcasters, the networks -- whoever has an ad-funded model -- is seeing the pain from that," he said. "It's still early, so people are still excited about the shift to mobile, but the pain is starting to become very real where publishers need to figure out how best to sell mobile."

One solution has been the advent of programmatic or automated advertising platforms such the one that Verizon Communications (VZ) purchased when it acquired AOL (AOL) this month in a $4.4 billion acquisition.

Programmatic advertising transactions by broadcasters and premium publishers surged 79% month-over-month between January and March, according to the Ooyala report.

"The programmatic channel has provided brands with a means to automatically spread a lot of money over a lot of video channels," Zenna said.


Yet even programmatic has its limitations, he said.

"For mobile to really take off, it will require a level of nuance and love in the way that users are experiencing them. And frankly, that's still being worked out," Zenna said.

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