Big proportion of mobile-ad clicks are worthless, study saysAugust 31, 2012: 2:25 PM ET
Accidental clicks and fraud make up 40% of all clicks on mobile ads, according to a mobile-marketing firm.
FORTUNE -- If figuring out regular Internet advertising is hard, figuring out mobile advertising is even harder -- especially given that a huge proportion of ad clicks are reportedly worthless.
A study by Trademob, a German mobile-marketing company, found that 40% of all mobile clicks are either accidents (buttclicks, perhaps?) or fraud. And mobile-ad click fraud is apparently growing fast, the company says. At the start of the year, fraud accounted for 10% of mobile-ad clicks. Now it accounts for 18%, according to the study, which Trademob shared exclusively with GigaOM. That site notes that Trademob "stands to gain by the awareness of useless mobile clicks" since the mobile-ad platform it peddles includes tracking tools for filtering out worthless results.
Still, whether the numbers are precisely accurate or not, such problems account in part for the fact that despite the growth in mobile Internet access, making money from mobile ads has proved extremely difficult. Some analysts cite this as a big reason for the weakness of Facebook's (FB) stock price since its IPO. Facebook itself has acknowledged the problem. Presenting ads is hard enough on a desktop computer -- it only gets harder when the real estate shrinks.
But as people increasingly take to mobile devices, the ads are following them -- along with the problems that Internet ads present, such as click fraud. Some of the fraud comes from app developers who generate false clicks from their servers, Trademob says. Another method, similar to what happens on the Internet, is to deploy bot networks -- this method serves the purpose of making clicks appear to be coming from different IP addresses, thus making them harder to detect. Trademob, of course, claims that its service can root them out.
Worthless clicks aside, though, the migration to mobile is presenting a major problem for ad sellers. During a presentation in May, former Internet-stock analyst Mary Meeker, now a venture capitalist with Kleiner Perkins Caufield & Byers, noted that the average CPM (cost per thousand ad-viewers) for Internet ads, at $3.50, is five times higher than the average CPM for mobile ads -- 75 cents.