mobile-advertising

Desktop has officially lost its foothold in the digital landscape. There will be nearly seven times more mobile phone (186,2766,000) and tablet (256,308,000) shipments than PC shipments (308,472,000) in 2014. In the US, 58% of adults own a smartphone and 42% own a tablet computer. Nearly 60% of digital media time spent is on smartphones and tablets, while only 40% engage with digital media via desktop. Mobile’s dominance in the device market marks a turning point for any digital industry, including advertising, and presents new opportunities and challenges.

According to the IAB, at $43 billion in 2013, US online ad spending is now equivalent to almost 60% of all of TV. Mobile only makes up 16% of digital spending at $7 billion. The 2014 Mary Meeker report states that there is a very large discrepancy between mobile usage and ad spending that, when combined with the online discrepancy, adds up to a nearly $30 billion opportunity. Thanks to players like Google, Facebook, and Twitter, mobile spending is growing at the breakneck speed of 110%. However, there is still a lot of ground to gain for mobile spending in order to catch up with audience usage. The three multi-billion dollar questions are:

  1. Is mobile advertising effective?

  2. What is holding back mobile monetization?

  3. How are audiences reacting to the new mobile ad landscape?

ComScore claims that mobile advertising “DOES work,” and proved with their BSL Benchmark metrics that mobile ads trump desktop ads by 1-4 points in aided awareness, favorability, likelihood to recommend, and purchase intent4. Mintel suggests that “the share of online adults making a purchase in the past month because of a mobile ad is roughly similar to the share that made a purchase in response to a television ad, even though brands spend 10 times as much on television advertising as on mobile advertising.” Mobile ads can also be used to amplify a message across screens, for 81% of users use a smartphone and television simultaneously and 66% of users use a smartphone and a PC.

According to a DoubleClick survey, advertisers expect a 41% increase in mobile creative campaigns and 67% of advertisers believe it is important to design specifically for mobile campaigns. The large and increasing demand for mobile rich media ads by advertisers suggests that agencies’ slow transition from developing Flash ads to HTML5 ads to reach mobile audiences could be a factor holding up mobile monetization. Advertisers also cited that the continued prevalence of desktop campaigns in the digital ad market, too many mobile options (like platform, device, sizes and tools) and insufficient client demand have also created a barrier to entry for mobile ads.

The mobile audience is a tough crowd when it comes to advertising. While mobile ads are noticed by 89% of smartphone users, 61% of respondents to a Mintel survey agreed that “it is easy to ignore ads on my phone.” Out of all of the respondents, 29% said they are comfortable receiving ads on their phone, while 26% strongly disagreed with that statement. Even so, the comfort level is raising when it comes to online ads, for only 17% of respondents were comfortable with online ads in 2013. This suggests that audiences may become used to mobile ads as they become more prevalent. In the meantime, younger age groups hold a greater positive attitude toward mobile ads, so targeting them should be worthwhile.