Mobile advertising looks like a spring seedling underneath the massive cloud that was $216 billion worth of all advertising in the U.S. last year. While it produced almost $4.75 billion, or 2 percent of all ad spend last year, mobile is riding a wave of growth that continues to outpace online by a large margin.
Online advertising grew at a compound annual growth rate of 47.2 percent from 1995 through 2012, while mobile grew 80.1 percent from 2007 through last year, according to John Fletcher, senior analyst at SNL Kagan. During a presentation at CTIA, a wireless industry trade conference in Las Vegas last week, Fletcher highlighted the shifts, trends, and new kids on the block that are increasingly mobile and impacting the bottom line for advertising overall.
Tablet use among the U.S. population is playing a profound role as the trajectory of mobile advertising steepens. About 22 percent of the U.S. market, or 69.5 million consumers, now use tablets, Fletcher says. Tablet usage grew 167.2 percent from 2010 through 2012, according to SNL Kagan’s latest data.
“I’ve heard that tablets are growing at a faster adoption rate than any technology in history,” says Fletcher, adding that tablets are enabling workforces with new capabilities in education, retail, and many other enterprise sectors. “The barriers to purchase these things are really low regardless of your household income,” he adds, mentioning the lower price points being introduced on Android tablets such as Amazon’s Kindle Fire.
Online advertising was still seven times larger than mobile last year, but the difference between the two channels in revenue by ad formats helps explain where mobile is complementing and augmenting marketing efforts online. Search comprised 50 percent of online ad revenue, while it commanded 56 percent in mobile, according to Fletcher. Non-video display ads and other media captured 43 percent of online ad revenue and 34 percent of mobile ad revenue.
Fletcher is particularly interested in video advertising, which is already commanding a greater share of mobile than online. Video ads generated 10 percent of all mobile revenue last year, while the online ad space carved out just 7 percent for video.
The mobile advertising space is crowded with startups, but the more familiar publishers and media companies are still dominating from the top down. “Publishers are growing much faster than the ad networks,” says Fletcher, adding that lower CPMs on mobile are impacting their slice of the action. He suggests that publishers are able to charge higher CPMs not only because of their reach, but also “because they have a Rolodex of direct relationships with these advertisers.”
Name recognition goes a long way in the advertising space too, Fletcher adds. Marketers and brands all know Twitter and Facebook, but they may not be familiar with Millennial Media, for example. Nonetheless, Millennial Media’s ad revenue grew 62 percent to $151.1 million last year, placing as the fifth largest mobile ad network or publisher. Millennial Media is running neck-and-neck with Apple, but the distance between the performance of those companies and Google is remarkable.
Sitting at the top of the mobile ad chain, Google generated $2.52 billion on mobile ads last year, according to SNL Kagan. Twitter came in a distant second with $315.6 million, followed by Facebook with $209.3 million, Pandora with $179.1 million, and Apple with $153.1 million.
Shopkick clocked an astonishing year-over-year growth rate of 1,900 percent, followed by Tapad at 683 percent, Shazam for TV at 425 percent, Twitter at 249 percent, and Hulu at 162 percent, according to SNL Kagan.
Image on home page via Shutterstock.
Many companies use SMS, email and push notifications to deliver updates to customers and stakeholders, and such notifications are especially important to publishers ... read more
Effective app marketing is not about generating app page traffic, but rather about ensuring your app is discovered by targeted and relevant users who will install your app and use it regularly.
Shell has switched its corporate marketing from 80% traditional advertising to 85% digital media, and has stopped blowing its own trumpet in order to focus on telling video-led stories about the alternative energy start-ups it helps.
Google sparked a small firestorm last week as reports surfaced that its intelligent assistant device Google Home delivered an unsolicited advertisement to unsuspecting owners.