Do Consumers Click on Mobile Ads?

Sunday, 12 Aug 2012 | 4:57 AM ET
Millennial Media
Source: Millenialmedia.com
Millennial Media

Consumers are more likely to click on mobile ads than they are to click on an online ad, Millennial Media CEO Paul Palmieri told CNBC’s “Squawk on the Street” on Thursday.

“The average click-through rate online is about seven-tenths of a percent,” he said. “The average click- through rate on mobile devices is 0.8 to 1 percent.”

But as Palmieri explained, it’s still about having the right ad in the right place.

Zillow’s CEO Spencer Rascoff also noted that a smartphone user is three times more likely to contact one of its premier real estate agent advertisers than a desktop Zillow user because the ads are “a service not a nuisance.”

Currently, the mobile ad space is dominated by Google , Millennial Media and Apple with about 56 percent of the market. With Millennial Media now embedded in over 35,000 different apps, the company has “a lot of visibility into what’s going to work where,” Palmieri said.

“When you show them an ad they like to click on, we can show them more of the same types of ads,” he added.

Millennial Media CEO on Monetizing Mobile Ads
Paul Palmieri, Millennial Media president, CEO & co-founder, discusses his company's second quarter earnings results and explains how he intends to grow his mobile ad company worldwide.

Facebook , meanwhile, has struggled as it makes the shift to displaying more mobile ads. While the company is investing heavily in the space because of its massive potential, CFO David Ebersman told CNBCthat it's still in the "early days" for mobile revenue and that the company has just ramped up its launch of "sponsored stories.”

Palmieri said Millennial Media is built to capitalize on this overall trend toward mobile adoption. In the second quarter, total revenue rose 75.6 percent to $39.4 million from total revenue of $22.4 million for the second quarter of 2011.

Millennial Media expects total revenue for the third quarter to be in the range of $43.5 million to $45 million.

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