Mobile will account for 49pc of Internet advertising by 2020: PwC
By Alex Samuely
June 13, 2016
Marketers may want to boost their mobile ad spend
Mobile Internet advertising is currently experiencing a major upward trajectory, with this trend set to result in mobile comprising of nearly half of all Internet advertising by 2020 as consumers increasingly eschew their laptops in favor of smartphones, according to a report from PricewaterhouseCoopers.
The report posits that much of the staggering growth in mobile ad revenue stems from technology behemoths such as Google and Facebook having adapted their business models to better suit mobile channels in the past three years. Consumption of mobile video is also set to continue its meteoric rise, thereby cementing the digital platform as a must-have advertising medium for the future.
There are three big things in mobile from this year's Global PwC Outlook, said Matt Hobbs, partner and U.S. advisory Internet leader at PricewaterhouseCoopers. First, mobile being by far the dominant way to get Internet access by 2020, with almost two-thirds of the world being connected through mobile internet.
Second, the tremendous growth in mobile advertising, including through mobile video, he said. Last but not least, we see the data demands and infrastructure related to mobile growing, with mobile being at the center of most entertainment and media experiences even though it is not always the primary device companies need to optimize their consumer experiences for the mobile-first world.
on the rise
Per the report, the United States remains the top worldwide Internet advertising market, followed by China. Various innovations and new technologies in the space such as new ad formats, platforms and programmatic usage have enabled advertising companies to effectively monetize mobile devices.
This trend will continue to grow, especially as consumers spend more amounts of time on their small-screen devices instead of their laptops. This will also prompt media companies advertising departments to adapt their strategies to better target on-the-go users seeking snackable mobile content.
Video accounted for nearly 82 percent of all U.S. data traffic last year, showcasing the potential for marketers to invest more heavily in this medium and receive optimal return on investment. The quality of the Internet has enabled this medium to grow more popular.
The rollout of 5G networks will also have a transformative effect on the advertising industry in the near future, according to PwC.
These aspects serve as main contributors to mobile taking top status as the most rapidly-growing sector of the Internet advertising market. Last year, it accounted for 34.7 percent of total Internet advertising revenue.
Interactive video ad units are rising in popularity
This number is expected to jump to 49.4 percent by 2020, proving that brands cannot risk leaving mobile behind as they pinpoint their future marketing initiatives.
Digital ads will also continue to experience massive growth rates, as the industry improves upon cross-channel advertising. Effective measurement still remains a large barrier to future growth, per the report.
Additionally, mobile media opportunities in foreign markets will abound in the future.
The amount of opportunity in global markets is incredible, with key countries in Latin America, Asia and throughout the globe having entertainment and media growth rates of more than double the global average, Mr. Hobbs said. We also see a near perfect correlation between those countries with an average age of under 35 having higher growth rates, driven in part by increasing internet access and the subsequent opportunity for digital revenue to fuel entertainment and media growth.
Younger consumers are comfortable with digital consumption, connected throughout more of their day, and have the time and resources to deeply engage with and consume entertainment and media content.
PricewaterhouseCoopers also revealed that paid search advertising will continue evolving, after generating approximately $20 billion of total Internet advertising revenue in the U.S. last year. Mobile and wired searchs combined share of total Internet advertising is set to reach 44.7 percent by 2020.
Voice-recognition platform such as Apples Siri and Microsofts Cortana have significantly transformed this aspect of advertising, with the space likely to evolve even more once artificial intelligence solutions become more heavily integrated into search platforms.
Mobile search's rise is partly attributable to voice-recognition platforms such as Siri
New platforms will also dominate social media and video advertising. YouTube is facing stiff competition from Facebook and Snapchat when it comes to mobile video consumption, and may continue being eclipsed by social media platforms such as Vine and Periscope.
Some publishers may struggle with this millennial-driven shift, as it will mean relinquishing some control and revenue to third-party services in exchange for access to their large audiences.
Ultimately, mobile cannot be discounted as a lucrative marketing channel by any media company, marketer or publisher.
Marketers and publishers must get the mobile experience right, and optimize the format and consumption for mobile devices, Mr. Hobbs said. Mobile is not always the only device, or even the primary device, but it is driving some of the most significant growth in this year's Outlook and should not be ignored, or customers will move to experiences that are optimized for their mobile engagement.
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