Last week’s 2014 digital ad spend figures released by the IAB and PwC revealed, once again, a mobile advertising industry in rude health. Mobile ad spend came in at £1.62bn, 63 per cent up on last year (like-for-like), when it crept past the billion pound mark at £1.03bn.
There are many ways to interpret statistics, of course, and at first glance, £1.62bn does indeed look impressive – half as much again as last year, three times as much as the year before that, eight times as much as the year before that, and 19 times 2010’s figure of £83m.
Look at the figures another way, however, and you see that growth in mobile ad spend is slowing. Between 2008 and 2009, it rose by 31 per cent. Between 2009 and 2010, by 121 per cent. Between 2010 and 2011 mobile ad spend grew by 145 per cent. Growth peaked between 2011 and 2012, when spend increased by 159 per cent. Between 2012 and 2013, mobile ad spend increased by 96 per cent. And as noted, between 2013 and last year, it rose by a relatively modest-looking 63 per cent.
So is the writing on the wall for mobile advertising? Not a bit of it. It’s merely a market that is at long last starting to grow up (even if mature is too strong a word), so the explosive growth of the early years will inevitably calm down. Even if mobile ad spend grows by only 30 per cent between 2014 and 2015 – and it’s hard to see how it wouldn’t - that will still put it over the £2bn mark. Not bad for a device still seen by many brands as too personal or too impractical to advertise on.
To see where mobile advertising is really at, it’s probably more instructive to look at how much of a slice of total digital advertising spend mobile is taking. In 2012, the mobile ad spend figure of £526m represented 10 per cent of total digital ad spend. In 2013, the £1.03bn spent on mobile equated to 16 per cent of digital ad spend. And 2014’s total of £1.63bn comes in at 23 per cent of a total digital ad spend figure of £7.19bn. That’s almost £1 in every £4 spent on digital advertising going to mobile, and more than twice the proportion that was going that way two years ago.
The most obvious reason for this, it seems to me, is that advertisers are losing their fears and inhibitions about mobile. The test budgets are slowly becoming real budgets and as word gets round that mobile doesn’t exist in a vacuum, so it is starting to come into the digital, and even the non-digital fold, as brands and their agencies work out ways to extend the reach and the effectiveness of a TV, online, outdoor or print campaign, by adding mobile into the mix.
It helps too that while the mobile advertising specialists of old, the likes of Millennial Media, Amobee and others, are busy establishing their wider digital credentials, companies that have made their name and their fortune in the desktop space – think Criteo as one example – are rolling out their mobile offering. The traditional media agencies also now get mobile in a way they didn’t just a couple of years ago. You only have to look at the number of award entries in our Mobile Advertising categories in last year’s Effective Mobile Marketing Awards, compared to the year before, to see that.
The fact that, according to the IAB figures, the average UK household now owns 7.4 “internet devices” can’t do any harm either, giving advertisers so many more opportunities to engage with consumers across their various smartphones, tablets, games consoles, smart TVs, watches and who knows what else going forward.
Over and above these trends, there are two obvious stars of the mobile advertising show – native and video. I would add social but that’s more a channel than a format, a place where most native and video advertising, incidentally, happens.
Mobile video ad spend in 2014 was worth £164m, 142 per cent up on last year, while content and native advertising generated a jaw-dropping £509m. To reiterate the point about social, ad spend on social media grew 65 per cent to £922m, with 56 per cent of that (£517m) going to mobile.
Don’t get me wrong, there is still some very bad mobile advertising out there – poor creative; uninspiring banners; interstitials that hijack the app page you want to see; and mobile ads that take you through to a full-fat desktop site. I hope too, that the industry doesn’t make the mistake of seeing native as the answer to all its prayers and carries on trying to innovate in other ways. To namecheck just one, check out Zapp360, a simple tweak to the traditional banner, but one that’s very neat and mobile-friendly.
But sometimes, you really can’t argue with the numbers, and the ones released last week should have put a smile on the face of anyone in the mobile advertising game.