May 16th, 2013

Mobile marketing spend far behind

One of the most quoted charts in 2012 was KPCBs slide showing time spent on different media vs total ad spend in the US. The chart highlighted a 20 Bn USD gap and opportunity for brands, ad networks and publishers in mobile marketing and web based on 2011 data.

To bring the debate back to life we decided to update the graph based on 2012 numbers from eMarketing and IAB. To start with it showed pretty much the same results as for 2011 with less time spent on print and more time spent on mobile as expected.

% Time spent & Ad spend on each medium in 2012 (U.S.)

 

The surprise however was that despite recent focus mobile and growth in mobile revenue for the top online brands (Facebook, eBay, Google, Amazon, etc) the gap continues to widen. According to our estimate the missed opportunity during 2012  grew to 23 Bn USD and at the current rate this will be over 25 Bn USD in 2013.

Evolution of Time spent Vs Ad spend in Mobile (U.S.)

To be fair, there is not necessarily a direct correlation between time spent and media spend. As with any other investment media spend should be based on ROI (media effectiveness of each channel). There are arguments that e.g. eCommerce conversation rates are lower on mobile than web (made up approximately 16% of total online traffic but only 5% of transactions in 2012). This does not take into account that mobile might be driving physical retail sales to a larger extent and that the sales process may start on a mobile device but end on a desktop device.

According to multiple studies such as MMA the ROI for ads is actually higher for mobile than on web. There are some valid arguments for lower spend however such as game play on mobile as this is not included in the comparable figures for web and TV.

 

When will mobile catch up? We think it’s starting to happen in 2013. Looking at Facebook and Google’s latest reports, mobile revenue is currently accelerating rapidly.

 

What do you think? Comment, like and share!

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