Monday, June 29th, 2015 | 5 min read
A report released earlier this year from PricewaterhouseCoopers looks at the online advertising boom and outlines the firm’s predictions for the field. Overall, Internet advertising revenue in the U.S. totaled $49.5 billion for 2014 – a 16% increase from the previous year. Assuming constant growth over the past 10 years, revenues grew at a compound annual growth rate (CAGR) of 17%.
Even more impressive is the surge in mobile advertising. According to the study, mobile ad revenue totaled $12.5 billion in 2014 – a 76% increase from the previous year – and now accounts for 25% of overall Internet ad revenue. With that, its CAGR was 110% over the past five years, compared to non-mobile’s paltry 10% growth during the same period.
So, which organizations are leading the way with the rise of mobile? Five prominent companies — Facebook, Google, Twitter, Pandora, and Apple (iAd) — claim the lion’s share of mobile display ad revenue, accounting for roughly two-thirds of the total in 2014.
As you can see in the graph above, Facebook continues to lead the pack, taking in more than one-third (37%) of the overall figure (and trumping its competitors by wide margins). The platform is estimated to reach about $5 billion in mobile ad sales for 2015, which represents a 39% increase from last year. And Fortune predicts that “video, especially mobile video, could blow up just as dramatically for Facebook, offering a gateway for advertisers to reach digital consumers in the format that most closely resembles television.”
Twitter also shows great promise down the line, as its mobile ad sales are expected to hit $1.19 billion this year – a whopping 72% jump from 2014.
According to eMarketer, mobile ad spend is on track to outpace desktop ad spend next year for the first time ever. This isn’t much of a surprise; you’re probably reading this on your mobile device, or at least have one sitting next to you.
Whether it’s paying bills or purchasing groceries, many quotidian tasks have migrated to mobile. In fact, people spend more time browsing on mobile than desktop. They even spend more time with their phones than they do watching television.
Mobile should no longer be thought of as the second screen for social media, as more than two-thirds (71%) of users’ time is spent on these platforms via a mobile device. In addition, content is significantly more shareable there: consumers are nearly 2x more likely to click and disseminate information on mobile than on a desktop.
Just as social networks drive mobile advertising’s growth, mobile drives advertising on social networks. The symbiotic relationship between social and mobile creates unique opportunities for brands.
First, since users carry around their device wherever they go and log on to platforms such as Facebook and Twitter in tandem, companies have the chance to be right there with them. Brands can also capitalize on the growing trends that emerge from social media, like video.
Arguably one of the fastest growing formats of advertising, 75% of consumers use a smartphone to watch videos online. With that, those viewers are almost 3x more likely to click through to a brand’s website from their smartphone or tablet than from a laptop or desktop.
Brands also benefit from the tracking available via social media networks, where users’ activities can be measured and targeted once they log in.
The non-disruptive nature of social media ads is an important benefit for brands as well. Social networks have taken great strides to make sure ads are seamlessly integrated into the overall experience. And nowhere is this seamless relevance more important than on mobile, where the intimacy of the interaction amplifies the reaction, for better or worse.
Marketers and advertisers who want to remain relevant and provide exceptional customer experiences should respond to this cultural shift with a mobile-centric advertising strategy. Here’s the thing: there’s no magical formula in mobile advertising – no comprehensive equation to guarantee eyeballs or sales. And it can be complicated, with hot properties cooling fast, mobile sites vs. apps, competing ad networks, connectivity issues, and more.
But there is one little trick that will take you far: if you figure out the social media side of mobile advertising, you’re halfway there.
Check out our guide that teaches you how to do just that.
About the Author: Tyler Davis currently works in ad operations, where he handles the back-end of clients’ digital advertisement requests. When he’s not doing that, he’s most likely writing, reading, cooking, exercising, or chasing stocks, or all of the above simultaneously.
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