Early this year, 2014, Acquisio surveyed a group of SEM agencies to learn their top digital advertising objectives for the year. When we asked the agencies about the diversification of their service offering, in particular mobile, 46% of SEM agencies responded that they were partaking in paid mobile advertising in the upcoming months, but more than half of agencies in the survey did not. More than half of agencies questioned do not include mobile marketing in their service offering.
Revenue from mobile advertising is 3x higher than it was in 2012, and mobile is getting more and more necessary for marketers and agencies to work with. Now, more than ever, the pressure is on agencies to create cross platform offerings for their clients that include mobile ads.
But for a multitude of reasons, the majority of SEM agencies still aren’t ready to take control of the mobile market. Here’s what we think is happening.
SEM agency reasons and issues against mobile
Lack of Incentive
First and foremost, agencies don’t offer mobile ad services because there is no monetary incentive. We asked 85 SEM agencies how they typically charged for paid search management services; the majority (43%) of SEM agencies charged based on a percentage of media spend.
What generally happens with mobile is that rather than increase ad spend to include mobile, marketers relocate spend towards the new device. That means agencies would be getting the same amount of money each month, but working a lot harder to offer and optimize for mobile as well.
For agencies, mobile is not a priority because it means doing more work without getting paid any extra. With those kinds of incentives it’s clear why few agencies are jumping on the mobile bandwagon.
More than just “mobile”
Mobile has become a buzzword that has almost lost its meaning. For agencies to offer mobile advertising it means a lot more than just “optimizing for mobile.” Mobile marketing consists of search ads, display ads, native ads, in-app ads and so on, and each need to be optimized and supported in a unique way.
For an SEM agency to create a structure that supports mobile there must be a specific strategy for each of the different mobile ad types. So in reality, it’s not about optimizing for mobile, it’s about optimizing for each facet of mobile, and that is a lot of work for agencies. The easy way out is to not offer any mobile services.
On the flip side, while some agencies are overwhelmed by all the areas mobile touches and feel unable to create an offering that properly encompasses it all, other agencies have not adopted mobile marketing because there is a misconception that mobile only stands for ads and apps.
In reality, mobile marketing involves some of the big players like Google, Bing Ads, Facebook and Yahoo Gemini. For that reason it’s even more important for SEM agencies to offer marketers mobile ad services.
Bids and Budgets
Another reason agencies are not utilizing mobile ads is because of bid and budget issues with enhanced campaigns. Previously marketers could separate campaigns, mobile and non-mobile, and assign a budget for each, but that is no longer possible. As a consequence, marketers can no longer control budgets separately and are unable to set unique bids or budgets for mobile.
Because of a lack of resources and knowledge necessary to create mobile campaigns to match the non-mobile campaigns, marketers choose to shut off mobile ads entirely rather than split the budget.
If mobile ads are not being used by marketers, agencies won’t waste their time building mobile offerings, but if agencies don’t provide quality mobile offerings marketers cannot build and utilize mobile ads. It’s a catch-22.
Eventually someone has to break the cycle. With the bid and budget management (BBM) offering at Acquisio, agencies are able to do just that. BBM gives marketers the opportunity to control bids for mobile, and the search engine service is the only one doing this so far.
Poor Results from Missing Features
While the majority of agencies do not offer mobile services, there is another large chunk of agencies that provide an inadequate mobile offering with too many important mobile ad features missing. A half-ass mobile offering can sometimes be even worse than no offering at all because it gives marketers false hope.
For those SEM agencies offering incomplete mobile ad services two features their platforms are likely missing are:
1) Call tracking
2) Optimized Landing Pages
It’s not enough to create an ad on mobile, it needs to make sense in the context of the device.
For example, many people use mobile in order to find local goods or services, like a local pizza shop because they want to order dinner or a local plumber because they have a leaky pipe. In those cases, the mobile ad should include a call extension and with a call extension there needs to be call tracking so marketers can analyze and learn from keyword trends and data. Without call tracking integrated in a mobile offering most SMBs won’t be able to see the conversions they desire. Clicks and leads mean nothing to small business who make a living off phone calls and walk ins.
Even more important for mobile advertising are optimized landing pages. When someone clicks on an ad, they are directed to a landing page to convert. If the page where marketers expect to make a sale or collect information is not optimized then most people who clicked the ad will bounce. Many agencies offer mobile ads, but the mobile landing page is not ready or optimized for conversion and that means all the effort of creating ads and collecting clicks goes down the drain.
Without these features mobile ads will be unlikely to convert or generate sales and revenue.
At this point, despite all the issues, pitfalls and unpleasant circumstances surrounding mobile ad offerings for agencies, SEM agencies need to step up and start offering effective mobile ad services or else they may just find that their offerings are too outdated for the marketers of 2015 and beyond.