The Future of Advertising at a Glance

Jordan Benedet is a Manager on the Client Strategy and Innovation team at
Social Media Group. Follow @jbenedet

Jordan Benedet is a Manager on the Client Strategy and Innovation team at
Social Media Group. Follow @jbenedet

No, I’m not talking about Catvertising. The online advertising landscape is changing at a staggering pace. A recent report from mobile analytics company Flurry provides a great visualization that illustrates how long consumers spend consuming TV, Print, Radio, Web, and Mobile media against how much advertisers are actually spending within each media category.

The results are clear. Print advertising is getting a substantial amount of advertising dollars, but consumers are no longer spending much time consuming that type of content.

Mobile and Web categories are where things get interesting, showing huge gaps between advertising spend and consumer time on each medium. Advertisers continue to pour money into traditional mediums, despite the fact that mobile and web platforms offer better engagement opportunities. This trend cannot sustain itself. Sooner or later, all advertisers should understand that their advertising budgets need to be adjusted to compensate for the migration to web, social media, and mobile platforms.

Mobile & Tablets

Mobile is a different advertising beast compared to traditional search and display ad units, and it’s projected that in 2012 mobile ad spend will reach $6.5 billion! The question is not whether your company should invest in mobile advertising, it’s how much should be invested.

Currently, the total amount of mobile ad impressions being served is somewhat limited. This is a result of mobile advertising still being in an infant stage, and also because screen real estate on smartphones and tablets is much smaller than the average computer screen, reducing the amount of total amount of ad impressions per page view. The limitation of available impressions is not necessarily a bad thing, however, since it will motivate advertisers to ensure ads and content are highly relevant to the audience being served.

Marin Software reports that ad clicks coming from smartphones cost 35% less per click, and produce 72% higher click through rates compared to desktop advertising. Unfortunately, that’s not the whole story—Marin also reports that computers and tablets produce conversion rates that are 160%, and 145% higher than smartphones, respectively.

Although the gaps in conversion rates are wide, it should be noted that smartphone conversion tracking can be much more difficult to achieve in comparison to standard desktop ads. Leo J. Shapiro and Associates has recently reported that 66% of smartphone owners use their devices to research products while shopping. If customers make their purchase in-store rather than online, this would result in conversions that cannot be tracked back to a mobile ad – essentially lowering mobile ad ROI.

Mobile ads are not just about search either. Neilsen recently released a study which states that Android users spend twice the amount of time in apps compared to the mobile web. This puts even more pressure on brands to ensure their mobile advertising strategy includes 3rd party mobile ad networks such as AdMob or iAd.

My point is that mobile and web advertising is where real growth is happening. It’s essential for advertisers to start exploring new ways to serve ads in mobile search, within apps, and on various social media networks to truly understand what budgets are required to achieve specific campaign goals (be that awareness or conversion). Now, if only those cool cats at the new Catvertising agency could figure out how to use a mobile phones and tablets…