Mobile Advertising is Leading the Way – Here’s the Proof!
Back in January 2006, the people behind the company AdMob had an idea. They saw the mobile phone getting bigger, getting color and hosting a simple form of the internet and they thought: we should put ads on there.
It proved a wise decision. In AdMob’s first six months, it served 30 million ads. In the second, it served a billion. By 2011, it was receiving 2 billion ad requests per day.
But by this time, it wasn’t AdMob anymore. It was Google. The search giant had bought the start-up for $750m.
This little tale illustrates a reality we all know so well. Not so long ago, mobile advertising just didn’t exist. Now, it’s on the cusp of dominating digital (which is, in turn, outgunning traditional analog advertising).
Along the way, mobile advertising itself has changed hugely. The first ads largely comprised lines of text added to an SMS message. Then came rudimentary banners. Later came social, location-based, video and interactive formats.
Calldorado, of course, is leading the way in another fast-growing spin on the platform: after-call advertising.
Today, mobile advertising is a given. It powers large chunks of the digital economy, most notably the app stores and the giant social media platforms.
And it is still growing!
How much? And in what form?
Let’s take a closer look.
Mobile advertising could bank $180 billion by 2020
If you think mobile is big now, wait until – say – two years’ time. Zenith reckons mobile advertising will pull in $180 billion by 2020, against desktop’s $94 billion total. That’s more than all the traditional media except television put together.
In-app advertising alone will pass $200 billion by 2021
The app economy keeps on growing, so it’s hardly surprising that in-app advertising is on a similar tear. App market watcher App Annie estimates the latter market will soar from $72 billion in 2016 to $201 billion in 2021. It says the fastest growth will be in the APAC region, which is growing at a rate of 25 percent CAGR (compound annual growth rate). EMEA will grow by 15 percent CAGR, while the Americas will remain the largest region in terms of ad spend, reaching $100 billion by 2021. That’s 3x the 2016 figure.
60 percent of US digital spend will be mobile in 2018
The total US ad market is projected to hit a new high in 2018, at $197 billion. Within this, digital ad formats (search, video, display and social), will make up $97 billion, and 60 percent of that will come from mobile advertising.
In 2018, people will spend more time online than watching TV
This year consumers will spend an average 9.73 hours consuming media, up from 9.68 hours in 2017. In 2018, online (including mobile) will have a 38 percent share, with TV at 37 percent and the rest coming mostly from print and radio.
Nearly half of digital display advertising is programmatic
The arrival of digital advertising changed the way ads were bought and sold. Out (mostly) went calling a person and making a booking. In came automated systems that bid for ad placings in real time. GroupM says 44 percent of online display investment was transacted programmatically in 2017 versus 31 percent in 2016.
Video and social are driving the next phase
Bigger phones, hi-res screens, and cheaper data are changing the face of mobile advertising. They are pushing the industry towards new formats based on video and social. Indeed, Zenith media says these two formats will grow 17 percent a year to 2020.
Android had edged IoS in mobile ad revenue since 2016
Historically, revenue per user on IoS has been higher than that of Android. It’s still the case, but the sheer number of people on the Google platform means that the latter now earns more overall. That switch came during the third quarter of 2016 according to adtech firm Smaato. Its report showed Android at 55 percent of global mobile ad revenue, compared to 41 percent for iOS.
In-app advertising captures 96 percent of publisher mobile spend
The app is now such a dominant format on the mobile channel that more than nine in ten ad dollars is allotted to it, so says adtech firm Smaato. It says in-app’s share of mobile ad spending on its platform increased by 16 points in 2017 to reach an amazing 96 percent. It believes that industry-wide, in-app holds an 87 percent share compared to mobile web.
Alibaba controls a third of China’s digital ad business
The giant Chinese market is a three-way affair fought by Alibaba, Baidu, and Tencent. The former is ahead for now. It controls a third of all digital ad revenues. That’s $20 billion. Baidu and Tencent combined control 19 percent.
The US digital market is two-thirds Google and Facebook
The desktop and mobile internet was supposed to spell the end of the gatekeepers. Anyone could build a site or make an app. In truth, however, there are just new kinds of gatekeepers. And when it comes to ad revenue, there are two: Google and Facebook. They controlled a combined 63.1 percent of US digital ad investment in 2017, with Google at 42.2 percent and Facebook at 20.9 percent. Is that a bad thing? It depends on which way you look at it. It’s not great for the old media giants, but Google and Facebook’s self-serve platforms have helped (probably) millions of small new players to find and monetize customers.
Facebook earned $15.28 billion from mobile ads in 2017
Seems hard to believe now, but Facebook was once behind the curve on mobile. Then it bit the bullet and re-configured its whole business around the small screen. It re-launched its app, re-organized its ad sales and bought Instagram and WhatsApp. It worked. In 2017, Facebook grossed $15.28 billion from mobile, which was equal to 88 percent of its entire ad business.
In 10 years, mobile advertising has gone from a curiosity to (arguably) the most important marketing channel of all. This is hardly surprising. We use the phone to read the news, play games, plan journeys and make purchases. It’s where our attention is. How could any marketer ignore that?
The challenge is to find ad formats that get the message across without compromising the user experience. At Calldorado, we have one. Our unique platform displays relevant ads on an after-call screen every time a user makes or receives a call. It’s effective and non-intrusive!
Next time we’ll be examining and dissecting Google’s latest operating system – Android P.