Why mobile ad spends are on the move

By: Steve Jones

October 19, 2016


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Mobile ad spending soared by 56 per cent in the first six months of 2016, according to a recent survey, and is now a billion-pound industry in its own right.

The figure equates to a new total for smartphone ads of 36 pence in every pound spent on digital or online channels. With total digital ad spending now standing at £4.8 billion – a year-on-year increase of over 16 per cent – that’s a big chunk of change: over £1.7 billion is now targeted at mobiles.

For social media advertising, the figures shoot up to 80p out of every £1 spent. Overall, mobile is forecast to account for 17.5 per cent of all ad spending this year.

So what’s going on? The impetus behind the figures is the greater precision enabled by smart devices, which track our preferences, choices, likes, and locations, according to the Internet Advertising Bureau/PwC Digital Adspend Study, which carried out the survey.

In short, the smarter devices get, the more advertisers like it.

While the size of the boom might be surprising, the underlying trend is not: for many organisations, phone/tablet website visits overtook desktop/laptop browsing two or three years ago.

For young people, phones are their primary news sources, while over 80 per cent of all smartphone users check their devices within an hour of waking up, according to a recent YouGov survey quoted in The Times.

That survey also found that adults spend 46 per cent of their online time on their phones – a figure that breaks down into 40 per cent of browsing time for men, and 52 per cent for women.

(Another recent study found that women now spend more time with their smartphones than they do with their partners: an average of 12 hours more every week.)

One of the drivers for the dominance of mobile in the social advertising space is the number of games and quizzes that users play and share with their friends, often without realising that they’re disclosing their Facebook profiles, and perhaps even their Friends lists and other personal information.

To play is to disclose.

This data, when combined with location services and the app settings that customers store on their devices, allow companies to target promotions at them, based on choices, locations, and preferences.

Video is another key area. By far the fastest growing data type online – no surprise, as the figures tend to be based on the number of bytes served – video advertising is a major growth market, and for advertisers its ability to both hold the attention and create an instant click-through or buying decision is compelling.

The other core growth area is advertorial-style ads on social platforms – ‘content and native’ campaigns, on which spending rose by nearly 30 per cent in the first half of 2016.

But as I mentioned in my previous article on the global game of Buckaroo that is the modern media landscape, this last – if fast-growing – category is the one that rising numbers of customers dislike and actively take steps to avoid.

Forty per cent of British consumers say that they “actively ignore” and are irritated by sponsored or promoted material, especially brands’ social posts on platforms such as Twitter, Instagram, and Facebook. And while this suggests that 60 per cent of users don’t actively avoid content/native campaigns, that’s hardly compelling evidence that they enjoy them.

But if your brand does go in for advertorial-style content, always remember: genuine thought leadership and an original viewpoint work far better than a hard sales message masquerading as journalism.

(So-called ‘brand journalism’ is a myth: it’s simply marketing; bolting the word ‘journalism’ onto ‘brand’ fools no one and, more often than not, insults your customers’ intelligence.)

So: target advertising budgets wisely and where they will be most effective on mobiles, rather than just spend where everyone else is doing the same. After all, the figures reveal that following the herd risks alienating nearly as many customers as you attract.

This is especially true if brand loyalty and an ongoing relationship with customers are your strategic endgames, rather than a quick ‘yes/no’ buying decision.

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