Mobile Advertising Will Dominate Social Networks

Mobile Advertising Will Dominate Social Networks

With mobile advertising growing at unparalleled rates, digital ad spending is on pace to overtake television by 2018.

If you thought the shift from analog to digital was fast, just wait until mobile takes over in a social world. By year's end mobile ad spending will comprise 68 percent of Facebook's revenue and 84 percent of Twitter's, according to a whirlwind presentation of stats and trends given by eMarketer Chairman Geoff Ramsey here at ANA's Digital & Social Media Conference.

Mobile ad spending in the U.S. will surpass $58 billion and capture 71 percent of all digital ad spending by 2018, according to eMarketer. Now that smartphones have reached a critical mass, the level of ownership among the buying audience most targeted by brands (ages 12 to 64) is above 90 percent overall. Almost 85 percent of all people in the U.S. aged between 11 and 64 own a smartphone today, but overall ownership hovers just over half of the total population at 51 percent.

Social media usage, which is just slightly higher at 54 percent of the U.S. population today, is increasingly occurring on mobile devices. More than 70 percent of all time spent on social media occurs on smartphones, according to comScore data cited by Ramsey.

"The only screen that matters is mobile," Ram Krishnan, SVP of marketing at Frito-Lay North America, says following Ramsey's presentation.

Mobile + Social = Mocial'

Zita Cassizzi, chief digital officer at Toms, says she and her team are now calling this trend "mocial." The general idea is that brands like Toms need to be social in their mobile activity and mobile in the way they socially connect. Call it mobilized social engagement or "mocial" for short.

eMarketer projects total media spend in the U.S. to grow 5.3 percent and surpass $180 billion this year, but most of that growth is being driven by digital and mobile. Year-over-year growth would fall to just 1.1 percent this year if not for the contributions of digital and mobile advertising, Ramsey says, adding that at least $51 billion will be spent on U.S. digital advertising this year.

Although TV is still the long reigning content king, mobile and desktop usage combined is now greater than that of television's average of 4 hours and 28 minutes per day. Mobile has pulled ahead of desktop usage too, besting desktop's average of 2 hours 12 minutes per day by an extra 29 minutes each day, Ramsey says.

"In just a couple years mobile ad spending will overtake desktop," he tells the audience, setting his sights on 2016. But the greater inflection point comes in 2018, according to eMarketer, when digital ad spending overtakes TV advertising for the first time. Indeed, desktop spending is already on the decline, dipping 1.2 percent this year as mobile spending jumps 83 percent driven mostly by gains in search and display.

Digital Growth Emboldens the Empowered

These new ad dollars for digital aren't exactly trickling down though. Google alone controls 39 percent of all digital ad spending in the U.S. and just a handful of companies command as much as 60 percent of the market, says Ramsey.

The lack of competition in the mobile space is even more uneven. The three biggest players Google, Facebook and Twitter earn more than 60 percent of all money spent on mobile ads in the U.S., says Ramsey.

Social ad spending will reach $6.8 billion in the U.S. this year, according to eMarketer. Facebook currently controls 71 percent of the market, which is the equivalent to 10 percent of all digital ad spending in the U.S.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags social mediainternetInternet-based applications and services

More about eMarketerFacebookFrito-LayGoogle

Show Comments