Wifi or Carrier Traffic? 9 tips to help you choose
Figures show that mobile advertising continues to increase, in 2013 $13.4 billion was spent on mobile ads and according to Zenith Optimedia, by 2016 that figure is expected to rise to $45 billion. With many advertisers unsure of the value of buying wifi or 3G traffic this article looks at the advantages and disadvantages of both sources of mobile traffic and gives you some key tips to help you make the correct purchasing choices.
Supply and Demand
Wifi traffic is plentiful, for example in the US 10% of mobile traffic is carrier traffic and a massive 90% is wifi. So as with any economic supply and demand rule, wifi traffic is cheap and 3G traffic is expensive.
You will pay a premium price for 3G traffic in tier 1 and tier 2 countries and the market has also become extremely competitive in tier 3 countries and emerging economies due to increased smartphone penetration making advertisers pounce on this 3G traffic, which in turn, has also pushed up prices in these territories. But that’s not the only factor that makes 3G carrier traffic so sort after, there is also the issue of billing. Carriers supply the ease of 1 click billing so consumers can pay for products without having to introduce credit cards. Prices for this traffic can escalate further when you bring RTB into the equation. It’s not unusual once the bidding war starts to see prices of $100 for eCPM.
So is wifi traffic suddenly looking like a much more attractive prospect? Let’s take a closer look. With wifi, an advertiser gets access to huge volumes of traffic at lower prices giving them the advantage of being able to invest little money for many impressions. Advertisers can still access all the targeting features for mobile traffic, except of course targeting carriers. So that sounds all well and good, but what about the ease of 1 click billing? Carrier doesn’t give you 100% of the sale price, the carrier is going to take a big chunk out, 25-30% after VAT is the average and if a further 10%-15% goes to aggregators/various middle men, a product owner can hope to keep around 40-50%. 1 click billing can also cause re-billing headaches. Because the payment method is so easy many consumers press it by mistake and then ask for their money back. Carrier billing is also highly regulated and there are various approval stages, limiting the types of products you can advertise. Wifi has none of those restrictions and you also get to keep 100% of the product sale.
So now with that explained here are some useful tips to help you make decisions before deciding which traffic source to choose.
To keep your experimental costs down always test new products and campaigns with wifi traffic first, you can carry out your testing with huge volumes of traffic and reach a much wider audience until you find what works best for your campaign. Then you can use those learnings to target 3G traffic to avoid making any expensive mistakes.
If you are not promoting a specific product but want to solely carry out a branding exercise you will be looking for volume of impressions rather than conversions, so again wifi is the best choice as it allows you to run and run campaigns for minimal investment.
Wifi has unlimited bandwidth compared to 3G’s set monthly MB consumption plan from a mobile carrier. This affects what the consumer will use his device for. Obviously if you are advertising bandwidth heavy products like video, music streaming or web cams, target consumers via wifi. With the limited bandwidth of 3G, target this traffic with ads for ‘lite’ product versions that you can then later upsell full versions.
More on devices
Think about which device on which the consumer is going to be viewing your ads. Most people use tablets and iPads solely via a wifi connection so select this type of traffic when targeting these devices rather than 3G. 3G is more smartphone focused and products working well on these devices are location based dating apps, text/chat apps.
3G ad formats
Choose your banner sizes carefully. If you are running a 3G campaign remember that the ease of the 1 click billing can also get you into re-billing territory due to consumers clicking on your banner by accident, this is particularly problematic with very small banners so try to use banner sizes of 300 x 250 which people are less likely to click on by mistake.
Consider the billing process carefully, 1 click billing is better suited to products that are impulse buys. Also bear in mind, that if a consumer is prepared to pay via 2 step billing he must really want your product, nurture this user with retargeting and upsell further products to him. Read more about carrier billing.
Consider the times of day that a consumer is likely to be using their device on 3G and wifi. At home it is likely to be wifi and when they are commuting to and from work on 3G. The ExoClick platform allows you to target users via day-parting so you can specify that you want to target carrier traffic early morning and early evening then target wifi traffic later in the evening and during the weekends.
Know your GEOs when deciding between wifi and 3G targeting. ‘The IAB U.S. & China Mobile Report 2014’ made a comparison between how consumers in China and the U.S. differ in terms of their mobile media consumption habits. One of the findings showed that while a large portion (39 percent) of U.S. users consume media on their phone when they first wake up, it’s the opposite in China where 45 percent of Chinese users consume media right before bed. Additionally, Chinese smartphone users are more likely to interact with ads on their mobile devices. In fact, 59 percent of Chinese users do so at least once a day, a stark difference from just 22 percent of U.S. users that interact with ads daily.
If you are bidding on ad space for 3G, in order to get those top spots you will have to out bid the top bidder, which can be costly so make sure that you have a product that no one can resist in order to justify your ROI.