'Desensitised' net users aren't clicking on ads as much

  • 30/01/2017
Ads usually get less than 1 percent clickthrough (Getty)
Ads usually get less than 1 percent clickthrough (Getty)

Snakk Media, which aggregates advertising space on mobile devices, 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 (CTR), 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 desensitised 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 per cent in the year-to-date, which is above its full-year target of 42 percent.

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