As the latest UK Digital Ad Spend figures are published for 2014 (courtesy of the IAB / PWC), it comes as no surprise to see that the mobile advertising space continued to grow at an alarming rate – faster than any other channel.
The UK spent £1.625 billion on mobile advertising in 2014, demonstrating an increase of £604 million from 2013; that’s a like for like increase of 63.4% in 12 months. As predictable as it is scary, it still shows the potential that has been missed and continues to be missed as companies from all sorts of sectors still try to avoid the obvious changes that they need to make in order to retain or grow their market share in the evolving marketing space.
As mobile ad spend in display now comprises 47% of all mobile advertising budgets, we may see search being taken over as the top advertising medium for mobile devices within the next few years. However, as long as retargeting still needs people to search in the first place and more people continue to search on multiple devices, including mobile phones, it’s difficult to see when a tipping point may occur.
Search spend on mobile increased from £581.3 million in 2013 to £836.9 million in 2014; a growth of 43.3%. Display is now hot on its heels, growing from £423.8 million in 2013 to £769.3 million in 2014; a growth of 96.2%.
The key factor that may slow down this dramatic growth rate is the penetration of smartphones in the mobile market in the UK which is close to saturation point (78%). However the amount of businesses that are still not mobile friendly (because of the website, the UX or the lack of investment in understanding the measurement of success) is still ridiculously high.
If you couple this with the fact that over 80% of all publishers remnant advertising is still not being monetised at the point of publication, it’s easy to see how mobile display advertising hasn’t really scratched the surface of its potential.
So the publishing industry, (as reluctant as it is) is doing its bit to use and develop the newer advertising formats. Content, Native and In feed advertising takes up nearly half of this mobile ad spend. I think we’ll see standard formats like interstitials and banner ads become less relevant as the rising star of the show will be rise of mobile video advertising. It’s grown in spend by 142% in the past year. In 2013 we spent £63.9 million and in 2014, spend in mobile video advertising has grown to £164.2 million. This trend will continue to grow.
So what do brands do next? We all know that Google’s Mobilegeddon is coming on April the 21st because more than half the web pages that we view are via a mobile device and, regardless of the eye watering growth in mobile ad spend, there is a massive under investment in mobile advertising. In fact, it still only accounts for 23% of the UK’s digital advertising spend.
If you look at the sectors that have used mobile advertising over the past few years, Consumer Goods was always going to jump on the band wagon first, closely followed by the Entertainment sector. As much as they are still largest spenders, it’s the Retail, Travel and Finance Sectors that have stepped up their game in 2014. Each realising that their respective sectors were far behind the curve, realising that their evolving consumer now demands relevant, responsive content as and when they want it in a format that works for their device. If you compare digital advertising spend across all devices and formats (not just mobile), Consumer Goods is still largest sector, but Travel and Finance sectors spend more than Retail and Entertainment. We will continue to see each sector evolve as engagement trends and user expectations continue to change.
Those that don’t invest in the year ahead will suffer at the cost of those that do. It’s that clear.