Internet users increasingly 'desensitised' to ads on mobile sites, apps, Snakk Media says

Monday 30th January 2017

Snakk Media, which aggregates publishers' advertising space on mobile devices and matches it to demand, says internet users are becoming increasingly desensitised to advertisements on mobile sites and apps.

The NXT-listed company made the comment while releasing its third business update for the 2017 year. The Auckland-based, Sydney-headquartered company said its click-through rate, which is the number of clicks on a mobile page or app advertisement divided by the number of times the ad is shown, was 0.96 percent in the third quarter and is running just below its full-year target of 1 percent.

That exceeds the industry average the company typically cites of 0.62 percent per advertising campaign, which according to an Edison report on the company comes from the 2014 Medialets Mobile & Tablet Advertising Benchmarks report.

As a result of internet users becoming desensitized to the ads, it was "imperative that acceptable CTRs are maintained and grown to keep advertiser and publisher confidence in the company's offerings".

"A high CTR can help a mobile publisher support the site or app through advertising revenues," it said. "It is also a strong indicator of the success of a mobile campaign, as more people have interacted with the campaign by clicking on its advertisements".

Snakk's gross margin was 60 percent in the third quarter, tracking at about its full-year target of 62 percent, it said. The company's compensation-to-revenue ratio was 41 percent in the third quarter but 50 percent in the year to date, which is above its full-year target of 42 percent.

"The battle for talent is particularly fierce in the mobile sector, where an extremely limited supply of expertise is rapidly driving up agency salaries, compounding the issues associated with staff turnover," the company said.

Snakk shares last traded at 35 cents and have declined about 60 percent in the past year.

BusinessDesk.co.nz

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