February 22, 2012
Revenue watch: Advertisers getting more interested in mobile
New research indicates that advertisers may be overlooking mobile ads in favor of print—for now. But that appears to be changing…
According to a recent report from Flurry (a mobile analytics provider), currently U.S. consumers currently spend nearly a quarter of the total time they devote to all media to mobile. This is second only to TV (which commands 40% of consumer media experience time), and is slightly ahead of computer-based web usage.
Yet major U.S. advertisers currently spend the least on mobile advertising—just 1% of total ad dollars spent in 2011, Flurry reports. In contrast, nearly 30% of all ad dollars currently flow to print media, which commands just 6% of consumers’ media time.
But advertisers appear to be catching on. In July 2011, an Interactive Advertising Bureau survey found that 63% of brand marketers reported that their companies’ mobile advertising spend increased over the past two years—and 29% reported an increase of over 50%.
Why the disparity between mobile ad dollars and time spent with mobile media? Flurry speculates:
“We believe the main reason for this disparity is that the mobile app platform has emerged so rapidly over such a short period of time. With the iOS and Android app economy only three-and-half years old, Madison Avenue and brands have yet to adjust to an unprecedented adoption of apps by consumers.
“Further, the mobile advertising ecosystem remains nascent, without sophisticated platform tools. Concepts of audience measurement and segmentation on mobile are still forming, and mobile lacks the kinds of systems that agencies take for granted on the web. For instance, mobile inventory is difficult to buy in volume, ad networks have yet to be integrated into Demand-Side Platforms (DSPs) and common standards for ad serving, tracking and settlement are yet to be defined.
“Just consider that large publisher properties like Facebook have yet to monetize their mobile properties, with many still needing to hire media sales organizations to position themselves to do so. As the mobile platform matures, and these problems are addressed, mobile advertising is poised to take off in earnest.”
As news venues and other publishers update their operations for the 21st century, they’ll need to reconfigure the revenue side of the business as well as the editorial side. On this front, they may want to focus more on mobile revenue opportunities, especially mobile advertising.
In the Washington Post’s Wonk Blog, Ezra Klein observed of Flurry’s report:
“I take this graph as fundamentally optimistic. There’s a lot of money to be made in advertising online and on mobile platforms. And since the future of advertising is also the future of how we’ll fund mass information, that’s likely to mean that there’s a lot of information that we’ll be able to fund online and on mobile platforms. The business model behind printed news might be dying. But the business model behind information is just transitioning. At least, I sure hope so.”
The News for Digital Journalists blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.
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