Earlier this week I had the pleasure of attending VMA Media‘s ‘Mobilenomics’ summit in gorgeous Deer Valley, Utah. The event kicked off with a presentation from eMarketer Senior Analyst, Cathy Boyle, where she provided insights into the research firm’s analysis of ‘The State of US Mobile Ad Spending’.
Spoiler Alert – the numbers look extremely promising moving into the second half of 2015 and beyond – that is of course if you’re currently working in the mobile industry. I can’t exactly say the same for desktop media, but let’s take a look at what was presented and you can make up your own mind.
Mobile by the Numbers
According to recent eMarketer reports, mobile ad spending in the US will increase 50.0% in 2015, reaching $28.72B and accounting for 49.0% of the overall digital ad spend. By 2019, that number will skyrocket to $65.87B, or 72.2% of total digital ad spend.
One of the more controversial statistics thrown out during Boyle’s presentation was the percent of mobile ad spend being accounted for against app install campaigns. A recent study done by eMarketer shows that only 10.4%, or approximately $3B, of total mobile ad spend is actually being used for app installs. As a caveat, these numbers include both search and display dollars, with social ads being lumped into display. If we isolate display alone that number nearly doubles, however many of us in the room felt that even at 20%, these numbers seemed to be a bit on the conservative side.
Mobile Web vs. App
One of the biggest differentiators between Mobile and Desktop is the ability to spend across two separate ecosystems on the same platform; Web vs. App. In-app spending dwarfs that of Mobile web, with 2015 totals equating to an estimated $20.79B, or 72.4% of mobile ad dollars, and $7.93B respectively. Year-over-year, we see double digit growth on both sides of the fence with in-app spend showing 42.6% growth between 2014 and 2015, and 36.8% on web during the same timeframe. As is the case with many of the eMarketer stats on mobile, there’s a bit of a caveat once again in the fact that these numbers include advertising that appears on mobile phones and tablets, as well as including all the various formats of advertising on those platforms.
Mobile search has always had a majority stake in the overall mobile ad spend and it’s actually set to eclipse Desktop search this year, racking up nearly $12.85B. That number nearly doubles by 2018, with an estimated spend topping out at $25.04B. While eMarketer is usually pretty accurate with their predictions, during the Q&A session, Boyle alluded to the fact that these numbers on search could escalate quicker with an increase in the adoption of deep-linking. Companies like Google, Apple and deep-linking startup, URX, are actively pushing the market to activate the deep-linking of their app content; ultimately making it more discoverable by users through simple search queries. Look for this to be the catalyst that really moves the needle in mobile search over the next couple of years.
Mobile display is also ramping up to overtake Desktop in 2015, hitting $14.67B in ad spend. Unfortunately for desktop players, that spend will stay fairly flat year -over-year while mobile continues to soar, topping out at $25.69B in spend within the next two years. As was the case with app downloads, there’s a bit of a caveat to these display numbers. As I mentioned before, eMarketer lumps social into the mobile display number; including Facebook’s News Feed ads and Twitter’s Promoted Tweets. Boyle made note that Facebook alone is estimated to represent 30% of mobile display in 2015, so take these display numbers with a small side of salt.
Of course we couldn’t have a serious conversation about mobile ad spend and areas of future investment without mentioning Mobile video. Currently video is estimated to hit $2.62B by end of this year. A modest number, but no where near what we’re seeing in search or display. However, I’m pretty confident in saying, I think we all know that’s about to change. According to Greg Stuart of the MMA, when discussing their recent SMoX Study on Cross Platform Effectiveness, Stuart urges marketers to begin investing long term dollars at today’s rates (at low frequency) in Mobile video. The study showed that video played a large role in generating higher ROI’s for brands like Coca-Cola and Walmart and Stuart believes the inventory available today is highly under-valued. During Boyle’s presentation, we learned that eMarketer shows Mobile video nearly doubling by 2017, increasing to $5.09B in total spend. These numbers seem to support what the MMA’s study ultimately concluded; Mobile video is an area for heavy investment by marketers in the very near future.
So what do all these numbers mean?
We can all agree that mobile, and the rise of the always connected consumer, has changed our lives and natural human behaviors forever; more so than almost any other innovation in history. As new targeting and tracking capabilities come to market, advertisers will begin to gain clarity on the returns of their mobile investments and how they might augment current marketing mixes in the future. The learning curve, for marketers and consumers alike, is long and many frustrations still lye ahead. But the future is bright and if we continue to make efforts to provide our clients knowledge on the where and how to invest their mobile dollars intelligently, we can begin to shrink the gap between innovation and education.
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