Mobile advertising in Japan: cracking the format formula

With almost 107 million mobile users in Japan, it’s easy to see why mobile has significant appeal for the country’s advertisers. In fact, mobile already accounts for nearly half of Japan’s overall digital ad spend and, by 2020, it is set to make up three quarters. So, how can mobile publishers make the most of the thriving mobile advertising opportunity?

To start with, they’ll need a deep understanding of the vast mobile formats available; including which ad types provide the best balance between user experience and revenue generation.

Interstitials: a pop-up dilemma 

Also referred to as pop-ups, interstitials override content with eye-catching ads in a bid to capture consumer attention. Yet while the high click-through rates (CTRs) they achieve might seem appealing, interstitials can have a negative impact on both users and marketers if used too frequently.

Firstly, their tendency to dominate screens fuels user irritation, especially on mobile as they often take over completely. Secondly, their sudden appearance can cause accidental clicks. Their continual disruption has even led Google to lower search result rankings for pages with interstitials. As a result, the potentially poor user experience this format provides and its possible misleading return on investment means it should not be the exclusive ad format for mobile. With 94% of Japanese consumers willing to use ad blockers, it isn’t a risk worth taking.

The traditional banner ad

The banner ad has been tried-and-true advertising staple that still has much to offer in mobile. Banner ads produce an average click-through rate (CTR) of up to 1%, which notably exceeds the response rate of other high-impact formats like TV, which is around .05%.

To utilise banners on mobile effectively, there are several factors marketers should bear in mind. Undeniably, some key adjustments are required; screen dimensions are smaller than desktop and varied, so creative designed for PC and laptop can’t simply be scaled down. Instead, marketers should consider building ads using tools that instantly adapt banner size-aspect ratio for different placements, such as HTML5. Plus, they can leverage technologies like dynamic creative optimization (DCO) to instantly adjust creative for individual interests and context.

They may not be new to advertisers, but banners have a bright mobile future. Marketers can deliver relevant, unobtrusive ads at relatively low cost.

Video: advertising’s rising star

Consumer appetite for digital video has substantially increased in recent years and mobile is frequently how users are tuning in. In Japan alone, eight in ten digital video viewers watch content via smartphones, and teens engage with video for up to an hour at a time.

Thus, the popularity of mobile video ads is also climbing, with marketers hoping to deliver positive user experiences and higher engagement. Video is possibly one of the trickiest ad categories to get right, particularly on mobile where user behaviour can be more complex.

Video requires a sizable investment to meet production costs and though engagement levels can be outstanding, campaigns need to be tailored to drive good returns. For instance, context makes a big difference: consumers ‘snack’ on video content while out and about, which means videos need to convey messages quickly and use minimal data. Placements should be chosen carefully: it’s probable a person checking a weather app in the morning won’t have time for viewing video ads, whereas a consumer browsing entertainment pages in the evening is likely to be more receptive.

MRAID: the multi-purpose protocol

First launched by the Internet Advertising Bureau (IAB) two years ago, MRAID—Mobile Rich Media Ad Interface Definitions—is increasingly gaining momentum as an in-app advertising power tool. In brief, the standard enables marketers to streamline distribution by serving one version of ad creative across all mobile apps, no matter which platform they operate on. This gives marketers the dual advantage of efficiency and flexibility; not only eliminating the resource-intensive task of constructing multiple ad variants, but also allowing marketers to switch between formats depending on what works best for each app.

And that’s not all MRAID offers; it facilitates ad interactivity too. For example, it can be used to boost the engagement capacity of traditional banner ads with inspiring calls to action and rich media attributes, such as video or galleries of revolving images.

It’s no surprise that MRAID is finding favour with marketers keen to master the balance of mobile advertising. As a standard that can modify ad formats for any app, it can be used to buy mobile ad space quickly and at scale, while simultaneously keeping the user experience benchmark high.

This is just a snapshot of the ad formats that work in a mobile environment. Newer formats such as augmented reality and 360-degree video also present opportunities to create more immersive mobile ads. But it remains to be seen how these will weigh on the scales of user experience and revenue generation.

While there isn’t a hard and fast rule for choosing the ideal mix of mobile ad formats, when it comes to blending the perfect mobile formula, marketers can follow one simple rule: ads should be chosen based on their ability to deliver experiences that work for mobile consumers and the bottom line.

Keisuke Meguro is senior publisher development manager at OpenX Japan.