US Mobile Spend Is A Sign Of Things To Come

US Mobile Spend Is A Sign Of Things To Come

Facebook’s mobile offering is one aspect that’s increasing the overall share of mobile ad spend, says Big Mobile’s Graham Christie.

Graham Christie
Posted by Graham Christie

There’s been a marked shift in mobile marketing spends in the U.S. not just normal trending good growth, but more pronounced.  This is a signal of things to come in the APAC region.  In the U.S. folk spend two hours 51 minutes a day on their mobile devices. The only other media with more time spent is TV at four hours and 21 minutes. The ad dollars to eye-balls mantra that has been ringing in our ears for years, is now, it seems, starting to play out.  The popularity of Facebook’s mobile offering is one of the factors fuelling mobile’s share of overall spend, and it’s actually good for everybody in the mobile ecosystem.  eMarketer thinks Facebook will control 20% of global mobile ad market by the end of CY14, that leaves a lot of options for distinct mobile media and creative planning.

In the last two years, the base of marketers with decent mobile experience has obviously grown, and although there is nothing like the talent pool needed to support the sector, in any market, the growing experience base of savvy marketers is enabling better decision making. In the mobile advertising space, there seems clear themes developing, eight of them as I see it; enhanced targeting capabilities, genuine scale, quality audiences, ease of workflow, tracking and analytics, brand safety, creativeness, and agility. Using this checklist of eight attributes, and getting real on the calibre of the answers is where lessons are learnt and change happens.  VentureBeat Insight published a report in October stating that budgets were climbing 36% this year, but also citing challenges.  The biggest of them was a lack of vendor tech integration, and secondly not understanding mobile tech, so there’s a need for advisers to up their game so mistakes are avoided.  The importance of mobile now means that decision makers need to increase the care and diligence with which they plan and execute, and the imperative to seek out credible answers that separate fact from fiction.

Programmatic Rising

eMarketer says that programmatic will account for 45% of display ad spend (U.S) by the end of 2014, with mobile itself 41% of that figure. Overall programmatic will rise to 63% in 2016.  Real time bidding (RBT) is the majority of ad type, but this is signalled to be normalised as better inventories, and control based models take hold, and from both supply and demand sides seeing the benefits more clearly. In Australia we’re witnessing this perhaps with the creation of APEX the Fairfax and Mi9 joint exchange touted for Autumn 2015 arrival.  The massive volumes of smart device traffic in Asia means there’s an urgent need for publishers to grasp this, and desire from advertisers to access, so I believe we’ll see a few markets show rapid implementation of this, learning from mature markets but traveling quicker along the path. The strength of traditional medias, and how business is really done, will determine speed of uptake.

Smartphones not slowing

The jungle drums have been beating about a slowdown in smartphone shipments. Not so, says the International Data Corporation. IDC’s latest data from its report, ‘Worldwide Quarterly Phone Tracker’ shows handset manufacturers shipped 328 millions units in the September Quarter, that’s up 25% on the same quarter last year.  This was over the 300 million mark for the second consecutive quarter. A chief reason for this cited is there’s a greater emphasis on emerging markets, (many of which are APAC of course), and the relative affordability of units.  So handsets are getting both better and cheaper.  More advanced markets, like Australia and Singapore, are indeed slowing down to single digit growth quarter on quarter, but in these markets, telcos are increasingly introducing plans offering free upgrades to keep life cycles shortened.

Smartwatches however…

Business Intelligence ran a global survey last month asking people about smartwatches. It seems there’s quite a bit of hard work required to convince prospective buyers these are worthwhile.

Headlining the findings is a whopping 51% of respondents who just ‘don’t see the point’, the next largest cohort is kind of worse, in that 13% ‘don’t even wear a watch’ today, I guess that could be seen as a target segment by optimists.

It seems that the lack of a killer app makes the proposition of a watch that needs to pair with your phone a bit odd. Of those that said they were likely purchasers, filtering calls, and information without digging out the phone, and also the health metrics area were top of the list.  Apple fans are relatively more upbeat about the prospect, no doubt whipped up by its unveiling by Tim Cook, but they will need to wait probably until April/May 2015 to experience it.  There seems plenty of buoyancy in the sector though, and time for smartwatches to develop more utility and a reason to be.  Time will tell.  Lame pun, sorry.

The thing of things (toT)

You heard this acronym hear first.  I’m not sure the Internet of Things (IoT), or the Web of Things (WoT), really works as a collective name for what’s emerging. Devices, mobile or not, don’t necessarily need IP to talk to one-another so lets overuse the word ‘thing’, and adopt the ‘ToT’ to give the industry as much wiggle room as it wants.  The Nest team, feeling pretty empowered by the $3.2 Billion acquisition by Google, have set up their Works With Nest program that has 4000 developers registered to it.

The Nest Thermostat which can communicate with the Pebble smartwatch is intended to become the base for some smarter home automation, i.e. via geo-fencing and knowing when you’re close to home and turning on heating/cooling based on your ETA, or via Jawbone’s Up band know when you’re waking up so appliances can be turned on.  Apple’s play here, HomeKit, is readying itself for developer access imminently.  The take-out of all this is that the ToT market is estimated, (by BI Intelligence), to become, by 2019, more than twice the size of the phone, PC, tablet, connected car, and wearable sectors combined, with the smartphone’s role in this ecosystem being central.

Graham Christie is the chief commercial officer of Big Mobile.