Brands rush to reach people watching shows and news from smartphones
Spending on mobile advertising in the US soared 89 per cent to $15.5bn in the first half of the year, taking up nearly half of online ad budgets, new data show.
Mobile makes up 47 per cent of all online ad expenditures — up from 30 per cent a year ago and far surpassing the 19 per cent share taken by banner ads, according to a report from the Interactive Advertising Bureau and PwC, the professional services firm.
The growth comes as brands rush to reach people who browse shows and news from their smartphones, rather than through a computer or television. “This is the tale of an inflection point,” says David Doty, executive vice-president of the IAB. “Desktop is declining and mobile is taking its place.”
Total online ad spending grew 19 per cent to $32.7bn in the first half of 2016, as digital appears set to oust TV from its historic lead over the US advertising market next year — driven by the exploding popularity of mobile videos.
The flood of money towards mobile comes as smartphones have displaced computers as the primary way Americans consume digital media. US adults now spend more than 3 hours per day on mobile, compared with 2 hours and 11 minutes on desktops and laptops, according to eMarketer, the research group — with Snapchat boasting 10bn video views a day.
Social media ad spending reached $7bn in the first half of 2016, up 57 per cent from a year ago, while digital video rose 51 per cent to $3.9bn.
The growth online “comes at a time when traditional media struggles to hold on to its audience share,” said David Silverman, a partner at PwC. “Social media, in particular, has filled in that gap.”
Google and Facebook have capitalised on the rise of the smartphone, swallowing the lion’s share of digital advertising revenues. In the US, 85 cents of every new dollar spent on digital went to the two companies in the first quarter of 2016, according to Morgan Stanley.