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Mobile Ad Spend Skyrockets

 In Digital Marketing, Mobile

How much time do you spend on your phone every day?

And I don’t mean using your phone for actually making calls. I’m talking about using it for everything else: apps, games, social media, and web browsing, just to name a few.

If I had to guess, it would be hours.

In fact, for most people, speaking on the phone is the thing they do the least.

It just goes to show how vital mobile has been for brands and marketers over the last few years. And, to be honest, it’s the brands that haven’t yet embraced mobile that are going to potentially be in trouble in the future.

Now, the fact that mobile usage is on the rise really shouldn’t come as a surprise to anyone. What might be more surprising is just how quickly mobile has become the go to default for consumers to get on social media, shop, and be online.

Because of that, mobile ad spend has dramatically increased over the last few years.

The Rise of Mobile Consumption

The year 2016 is expected to be pretty big when it comes to mobile ad spend. According to the site eMarketer:

The global mobile advertising market will hit two significant milestones in 2016, according to new figures from eMarketer, surpassing $100 billion in spending and accounting for more than 50% of all digital ad expenditure for the first time.

Take a second to let those numbers really sink in.

That $100 billion dollar number is worldwide spend. It’s pretty amazing, considering that in 2013 the number was just over $19 billion, according to this chart from the same eMarketer article.

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This chart alone should highlight the dramatic rise of mobile in just the last few years. It is growing at a double-digit (and in some cases triple digit) rate, year over year.

Plus, take a look at the dramatic increase in how much of total media ad spending is now done on mobile. It went from a tiny 3.7% in 2013 and is projected to be over a quarter of all spend by 2019.

So why has mobile ad spending grown so much?

The easy answer is because our phones are increasingly becoming more and more vital in our everyday lives. A study by ZenithOptimedia found that by next year, the average person will spend over 500 minutes a day consuming media. But, as mobile has grown, so has the percentage of those minutes that are devoted to mobile media consumption.

Take a look at this chart from the same study.

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Media consumption in just five years has increased by over 100%, while basically every other form of media (besides outdoor i.e., billboards, have decreased by quite a bit.

Plus, internet usage is projected to be upwards of 30% of all media consumption in the next year. So when you do the math, that comes out to the average person spending over 2.5 hours on their mobile devices consuming media every single day.

The only thing that beats those numbers? Television.

And as we all know with the rise of Amazon Prime, Nexflix, Hulu, and YouTube, many consumers are “cutting the cord” and spending time watching on their laptops, tablets, and phones instead of the television.

We can only imagine that number is going to continue to grow.

Social Media Ad Spend

One of the biggest areas of growth when it comes to mobile advertising spending has to be with social media.

Now, with the rise of Facebook, Twitter, Instagram, and Pinterest ads, brands and marketers are presented with more opportunities to reach consumers than ever.

There’s also another reason why social media ad spend has been increasing: it works. Even though the internet isn’t that old, we’ve been bombarded with so many banner (and other types of) ads that click through rates are absolutely dismal.

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The above chart is from SmartInsights, and highlights exactly what I’m talking about.

At this stage, getting a click through rate of .15% on any type of banner ad means you’ve beaten the average and have created a winner. Right now, overall, the average click through rate in North America stands at about 0.1%.

Doesn’t quite make you want to scream from the roof tops, right?

Now, the same article takes a look at Facebook and Twitter ads, take a look:

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It’s pretty clear that there is a big difference. These two platforms are driving real results back to brands and marketers. Which is why so many of them are investing heavily in these platforms.

What’s really driving the success in clicks on platforms like Facebook are native ads. A recent study conducted by Facebook and IHS Inc. found that native ads are a huge winner on Facebook. Not only do these types of ads have a higher rates of clicks, but they are also much higher when it comes to levels of engagement.

Here’s what the study had to say, via MarketingLand:

The key driver for the significant rise of native ad units is that they have higher engagement rates than traditional banners. The report finds that engagement rates are 20 to 60 percent higher on native ads than on banners and drive retention rates that are 3x higher.

By now (if you’ve been an avid reader) you know that we think engagement rate is a key driver for success when it comes to establishing an emotional connection with the consumer.

Those potential consumers who actively engage with content, be it a Scratch-it reveal, or a native ad, are going to typically see higher results in terms of clicks, and eventually purchases as opposed to consumers that don’t engage at all.

Facebook has decided to go all in when it comes to mobile ad spend. They’ve made it easier than ever for brands and marketers to use their platform as a space for advertisements that will directly reach their target customer.

Look, from the same article, at the mobile advertising share by company:

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Facebook dominates.

It holds almost half of all global mobile display advertising share out there. My guess is they are only going to continue to hone and develop that. They’ve placed a stake in the idea that mobile ads are going to continue growing at a dramatic rate, and want to be the top provider out there on social media.

Chances are, they’ve made a good decision.

Has Your Brand Embraced It?

Now, the question is, has your brand jumped on the mobile advertising bandwagon? If you haven’t, now is the time to invest in getting some campaigns rolling.

The good news is that although the growth has been dramatic, and will continue to rise over the next few years, the cost of many mobile ad campaigns are actually quite affordable, for now at least. As more and more brands jump on, the prices will continue to rise.

But, the fact of the matter is, mobile is here to stay. Consumers are going to continue to rely on their mobile devices for most of their online needs and the brands that are able to reach them, and more importantly, engage with them on mobile platforms are going to end up being better off in the long run.

How has your brand embraced the rise of mobile? Have you been able to create mobile ad campaigns?