The exponential growth in internet usage has led to traditional forms of advertising such as print and TV gradually losing share of wallet to digital advertising. The latter is highly targeted, results in a higher percentage of conversions, far more cost effective and hence offers higher return on investment. Digital advertising also has a positive effect on branding as it exposes a product to a large worldwide audience. The $80B digital advertising industry is dominated by Google, Facebook and Yahoo.
Even as digital advertising is causing a paradigm shift in the rules of the game, there are changes that are occurring in the landscape. The mobile phone is emerging as the most used digital device by a big margin, and this trend is only expected to continue:
This is corroborated by several surveys that show a steady increase in mobile media consumption. While Koreans consume an average of 5.7 hours of media per day, mobile media consumption accounted for 34.7%. Interestingly, half the viewers even multi-tasked on mobile devices while watching TV. In the US, while average media consumption per day is nine hours, mobile tops with a share of 2.4 hours overtaking TV (2.35 hours) and PCs (1.6 hours). People, especially the younger generation, are increasingly consuming media on their mobile devices to make decisions about which movie to watch, where to shop and research the best deals on offer. The 2012 ForeSee Mobile Satisfaction Index: Retail Edition revealed that usage of mobile for shopping in the upcoming holiday season will increase leading to a scramble among retailers to implement a mobile strategy. The second trend that is visible is the rising adoption of tablets. The tablet is evolving into the preferred platform for consumers as it is slim and light besides being equipped with batteries that can endure through the entire work day, gradually shifting focus from the desktop PC. Furthermore, according to Forrester, tablets are set to replace laptops by 2016. The report reveals that tablets are set to become the mobile device of choice relegating the laptop to third device status. It also estimates that tablet sales will touch 375 million taking the global tablet base to 760 million in 2016.
What all this tells us is that we are now poised to witness another change in the scenario with the emergence of mobile advertising as a significant channel for marketing activities. Informa Telecoms & Media reports that mobile advertising revenue is expected to touch $12.8 billion in 2013 compared to $8 billion in 2012 with display ads on mobile sites and mobile search contributing substantially. Further, in-app advertising is expected to experience greater growth as many mobile ad networks are earning larger revenues from in-app advertising with smartphone users spending more time using apps than browsing the web. Consequently, the mobile advertising landscape will also see the entry of new players who will disrupt the current digital advertising environment by enabling brands to connect with the consumer on a far more intimate level. The ubiquitous nature of mobile devices provides marketers an unparalleled opportunity to engage with the mobile customer through personalized rich media ads which engage and interact with the consumer on a one-to-one basis. Also, the average age of the mobile user is low allowing advertisers to target a younger age group. This aspect spurred a very renowned and old brand like BBC BBC Radio 1 to opt for a mobile advertisement to publicize the change in its breakfast show host. Mobile advertising spends, which have almost doubled in 2012 compared to 2011, will grab a larger share of the advertising budget of companies with smartphone and tablet sales set to outpace PC and laptop sales. The contours of digital advertising are changing yet again, about 10 times faster than the transition from traditional TV and print to digital, and interesting times await us!