Historic mobile ad surge threatens print
If you compare the modest amount of time that consumers read newspapers with the billions in advertising dollars spent on the medium, you will see that newspapers long have captured far more than their fair share of the advertising pie. But this could begin unraveling with a vengeance in 2015, as mobile advertising surges to record levels.
As discussed in a moment, mobile advertising expenditures exploded by 76% in the first half of 2014 to $5.3 billion, surpassing even the sum spent on banners. Meanwhile, a chilling survey of advertising executives shows that 41% of them plan to fund their expanding mobile advertising budgets in 2015 by reducing print expenditures.
In other words, mobile’s gain could prove to be a further setback to publishers who already have seen their advertising revenues decline by more than half since peaking at $49.4 billion in 2005. Here’s why publishers should be worried:
The disproportionate share of dollars spent on newspaper advertising is illustrated in a simple analysis put together recently by eMarketer, an independent analytics firm. By dividing the amount of advertising dollars spent on print by the number of minutes the average American spends with the medium, eMarketer found that advertisers in 2014 spent 83 cents per minute to reach print readers and only 7 cents a minute pursuing mobile users.
Inasmuch as markets abhor this sort of inefficiency, it is axiomatic to conclude that advertisers will begin to vector ever more of their dollars from print, where the average American adult spends a combined 26 minutes a day with newspapers and magazines, to smartphones and tablets, where the average use is 2 hours and 51 minutes a day. Over the years, it should be noted, mobile use has increased at a break-neck pace, rising to the current level from less than half an hour daily in 2009. In the same period, combined newspaper and magazine readership slipped from 50 minutes a day to 26, according to eMarketer.
With consumers spending ever more of their time on mobile devices, it makes sense that advertisers are spending more of their money on mobile media. In the first half of 2014, mobile ad expenditures increased 76% over the prior year to $5.3 billion, according to the Internet Advertising Bureau, a trade group. The IAB reported that the mobile growth rate was five times greater than the 15% gain in advertising across all digital categories.
Digital ad statistics for all of 2014 will not be available until later this year, but here is what we know now: If the digital advertising market expanded as rapidly in the second half of 2014 as it did in the first, then full-year mobile sales for the year would be $12.5 billion. Assuming the over-all digital advertising market grew as much in the second half of 2014 as it did in the first half, then mobile would have represented fully a quarter of the $49.3 billion in ad sales the industry was on track to produce in 2014.
To put this in perspective, mobile advertising has rocketed from insignificance in 2010 to being second only today to desktop search advertising, which represents about 38% of total digital ad volume.
As for the future, PricewaterhouseCoopers projects that worldwide mobile advertising will increase by some 25% in 2015, while Magna Global forecasts a 64% gain. Either way, it is a lot.
Thanks in equal parts to inertia on the part of marketers and to able salesmanship on the part of the newspapers and magazines, publishers long have garnered more than their fair share of advertising dollars. After all, it is easier for advertisers to buy tens of thousands of dollars in print advertising than to place, monitor and analyze the performance of tens of thousands of digital ads. And it certainly is more fun attending a basketball game with a congenial ad rep than crunching numbers on a Google Ads spreadsheet.
But the powerful shift to mobile advertising could change things precipitously. Here’s why:
After interviewing some 300 senior managers at consumer brands and advertising agencies, a consulting group called Advertiser Perceptions found that 41% of the respondents plan to boost their mobile ad budgets in 2015 by reducing the sums they spend on print. In addition to trimming print, 34% of the marketers said they would cut television spending and 32% said they would reduce traditional digital display advertising.
The study found that 83% of the marketers plan to shift to mobile because they believe the intimacy and immediacy of handheld devices will enable them to have more individualized and instantaneous relationships with their customers than ever before.
With “more and more people using mobile,” said one marketer quoted anonymously in the report, “we are moving our ad spend…so we can reach users via the devices they currently are using to access content.”
It’s axiomatic.
© 2015 Editor & Publisher
As discussed in a moment, mobile advertising expenditures exploded by 76% in the first half of 2014 to $5.3 billion, surpassing even the sum spent on banners. Meanwhile, a chilling survey of advertising executives shows that 41% of them plan to fund their expanding mobile advertising budgets in 2015 by reducing print expenditures.
In other words, mobile’s gain could prove to be a further setback to publishers who already have seen their advertising revenues decline by more than half since peaking at $49.4 billion in 2005. Here’s why publishers should be worried:
The disproportionate share of dollars spent on newspaper advertising is illustrated in a simple analysis put together recently by eMarketer, an independent analytics firm. By dividing the amount of advertising dollars spent on print by the number of minutes the average American spends with the medium, eMarketer found that advertisers in 2014 spent 83 cents per minute to reach print readers and only 7 cents a minute pursuing mobile users.
With consumers spending ever more of their time on mobile devices, it makes sense that advertisers are spending more of their money on mobile media. In the first half of 2014, mobile ad expenditures increased 76% over the prior year to $5.3 billion, according to the Internet Advertising Bureau, a trade group. The IAB reported that the mobile growth rate was five times greater than the 15% gain in advertising across all digital categories.
Digital ad statistics for all of 2014 will not be available until later this year, but here is what we know now: If the digital advertising market expanded as rapidly in the second half of 2014 as it did in the first, then full-year mobile sales for the year would be $12.5 billion. Assuming the over-all digital advertising market grew as much in the second half of 2014 as it did in the first half, then mobile would have represented fully a quarter of the $49.3 billion in ad sales the industry was on track to produce in 2014.
To put this in perspective, mobile advertising has rocketed from insignificance in 2010 to being second only today to desktop search advertising, which represents about 38% of total digital ad volume.
As for the future, PricewaterhouseCoopers projects that worldwide mobile advertising will increase by some 25% in 2015, while Magna Global forecasts a 64% gain. Either way, it is a lot.
Thanks in equal parts to inertia on the part of marketers and to able salesmanship on the part of the newspapers and magazines, publishers long have garnered more than their fair share of advertising dollars. After all, it is easier for advertisers to buy tens of thousands of dollars in print advertising than to place, monitor and analyze the performance of tens of thousands of digital ads. And it certainly is more fun attending a basketball game with a congenial ad rep than crunching numbers on a Google Ads spreadsheet.
But the powerful shift to mobile advertising could change things precipitously. Here’s why:
After interviewing some 300 senior managers at consumer brands and advertising agencies, a consulting group called Advertiser Perceptions found that 41% of the respondents plan to boost their mobile ad budgets in 2015 by reducing the sums they spend on print. In addition to trimming print, 34% of the marketers said they would cut television spending and 32% said they would reduce traditional digital display advertising.
The study found that 83% of the marketers plan to shift to mobile because they believe the intimacy and immediacy of handheld devices will enable them to have more individualized and instantaneous relationships with their customers than ever before.
With “more and more people using mobile,” said one marketer quoted anonymously in the report, “we are moving our ad spend…so we can reach users via the devices they currently are using to access content.”
It’s axiomatic.
© 2015 Editor & Publisher
posted by Newsosaur at 5:00 AM
4 Comments:
So, an emarketer firm says emarketing is more efficient? Look, we still publish a B2B magazine in print as well as on-line because our advertisers want it. They pay a huge price premium because they see the magazine held on peoples' desks for months (Broadband Communities, www.bbcmag.com). Frankly drives me crazy, but that's the way it is. And all our non-advertising revenue growth is tied more to our online services -- databases, financial models and so forth. True, newspapers should be almost as perishable as online in the keep-around department. But print must somehow work.
It should be obvious that the "time spent" metric is just one of many.
I'm more concerned when I do release a huge new study of all 3144 US counties showing that almost all of the nation's economic and population growth is in high-bandwidth counties. It garners plenty of notice in the B2B press and strengthens the FCC's hand in its pending redefinition of "broadband at 25 Mbps... and stimulates Congressional calls from staffers investigating new legislation...and as near as I can tell has not been picked up by a single print newspaper. The digital tide washes over them, and they militantly won't look at what is happening.
Time spent does not equal sales. According to IBM Digital Analytics Benchmark, reported by DMNNews, more time was spent on mobile phones than PCs during the holidays but more sales were made on desktop PCs and the sales totals were larger. Here's the link: http://www.mediapost.com/publications/article/241068/mobile-got-traffic-but-desktop-gets-online-sales.html
If time spent equaled sales the billboard business wouldn't even exist. Advertisers should measure ROI verses time spent unless all they're doing is building brand awareness and don't care about actual sales. Personally, I hate mobile ads and avoid them at all costs. They're an annoyance.
How much of that time spent on mobile devices was on playing games? Wouldn't it be more useful to know how much time mobile users spend perusing news?
I think we are going to see continue seeing this trend in ad sales. With the news paper industry slowly fading away, it only makes sense that ad execs would starting shifting their sales to another medium. Not only is it cheaper, but more eye are coming across the advertisement through mobile ads. However, I still believe billboards do not need to worry. On a given day, the ads seen from Interstate 495 hit into the millions. So while mobile ads may be surging, i think it will take some time before we see print disappear entirely.
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