A sharp rise in the amount of time people spend using their mobile devices is quickly reshaping the media industry and could undermine the growth of internet advertising, according to new industry research.
Advertising dollars have yet to follow the trend, posing significant challenges for publishers who see their audiences migrating to mobile content but marketers not yet shifting their budgets.
Excluding time talking on the phone, US adults now spend an average of 82 minutes a day using mobile devices, about four times the 22 minutes people spent with their mobile devices in 2009, according to eMarketer, the research group.
The surge in mobile activity comes as growth rates slow for both the time people spend online with their desktop and laptop computers and internet-connected televisions and the dollars marketers spend on online ads. People now spend an average of nearly three hours a day online, and double-digit growth rates are not likely in the future, according to eMarketer.
Consequently, growth in online ad spending has slowed. The US online ad business is expected to increase 13.6 per cent this year to $34.7bn, after growing 19.6 per cent last year. By 2016, online ad spending should increase just 1.5 per cent to $43.4bn, eMarketer projects.
While mobile is capturing a larger share of time spent consuming media, up to 11.7 per cent this year from 3.5 per cent in 2009, its share of total ad spending is a minuscule 1.6 per cent. “Even on the desktop web, ad dollars are still playing catch-up to time spent with the medium – and that game is even further behind on mobile,” eMarketer said.
Growth in mobile ad spending is expected to surge in the next couple of years, with eMarketer projecting an increase of 80 per cent this year to $2.6bn. But several challenges remain. For instance, Google charges cheaper prices for mobile search ads because it is less likely that consumers make purchases from mobile devices. Small screen sizes, meanwhile, prevent publishers such as Facebook from delivering as many ads per page.
Television continues to dominate both the time people spend with media as well as its share of advertising budgets. US adults spend an average of more than four-and-a-half hours watching television a day, or a 39.8 per cent share of time spent with all media. TV attracts $64.5bn in ad spending, or a 38.9 per cent share of total ad spending.
Future growth in mobile ad spending is likely to be fuelled by cutbacks in print ads. Print media account for 20.7 per cent of total ad spending, but only 5.4 per cent of the time people spend with media.
John Wren, chief executive of advertising group Omnicom, called mobile the future of the industry during a call with analysts last week, noting that his group saw significant growth in the use of mobile advertising for the first time during the most recent quarter. “We’re just at the beginning of where mobile will go,” he said.
“That remote control’s with you 24 hours a day and generally always in your pocket. Whatever shifts we have seen up until now, we’re going to see yet another seismic shift.”