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Mobile ownership has now passed the point of critical mass in terms of global ownership: More than half of Americans now own a mobile device, and almost two-thirds of the UK population owns a smartphone. It’s only natural that mobile advertising has taken a place front and center amid the advertising strategies of small and large businesses alike. Here’s a look at just how popular mobile advertising has become, and why it may deserve a place in your marketing budget.
Though television remains the dominant medium for media consumption (accounting for about four hours of daily media consumption), mobile use is steadily rising. In fact, eMarketer estimates that the average person now spends about three hours a day on a mobile device. Perhaps more importantly, those three hours represent a 20 percent increase over mobile usage rates just one year ago, when user’s time spent on laptops, mobile devices, and desktop computers was fairly balanced. The shift toward mobile advertising investment has followed suit: In 2013, global mobile advertising spending increased by 105 percent. This year, it’s expected to jump by another 75 percent, accounting for a total spend of more than $30 billion.
Research conducted in 2013 by Ipsos estimated that the average user under the age of 35 spent more than four hours a day on various social networking sites; users between the ages of 35 to 49 dedicated at least three hours of their day to social media. In tandem, Business Insider reported that at least 60 percent of all social media activity took place on a mobile device, a number that continues to rise steadily. In early October, Facebook reported that its Q3 advertising revenue, which amounted to nearly $3 billion, had increased 64 percent over the previous year, and two-thirds of mobile advertising response activity came from mobile users.
According to media expert Gordon Borrell just $2 billion was spent on mobile ads in 2012. He estimates that by 2016, that number will skyrocket to $24 billion. Further, he predicts that 88 percent of all local advertising will be delivered on a mobile device. Consumers are increasingly comfortable with receiving marketing offers on their mobile devices, including those that are delivered within apps and triggered by their location, search activity, and purchase behaviors. Mobile advertisers are adjusting promotional strategies accordingly.
eMarketer estimates that more than half of mobile users over the age of 18 will redeem some kind of digital offer, both offline or online, in 2014; 70 percent of those users will redeem the offer on a mobile device. Though consumers currently purchase on tablet devices more frequently than smartphones, the trend is expected to normalize by 2015. By 2016, eMarketer predicts that 76 percent of all digital coupons will be redeemed on a mobile device.
One of the great challenges marketers are tasked to overcome across channels isn’t just how to reach the right audience with the right message — but how to reach them in a way that translates into a measurable return on investment. Mobile advertising stands to offer a solution to that age-old conundrum: According to research by iAcquire, 70 percent of mobile searches lead to direct action on a merchant’s website within an hour. Given this high probability of ROI, media advisory firm BIA/Kelsey predicts that locally targeted mobile ads, which represented 38 percent of overall U.S. mobile ad spending in 2012, will grow to 54 percent in 2017. Further, it predicts that mobile search ads (text-based advertising that is applied to search queries made on mobile devices) will grow from $704 million in 2012 to $5.7 billion in 2017.
