U.S. Mobile Advertising Spend Badly Lags Engagement

It’s true that U.S. advertisers have been slow in shifting dollars to mobile. But we don’t expect mobile ad spending to rocket up to engagement levels anytime soon. 

Mary Meeker gave her latest State of the Web presentation, revealing that mobile accounts for just 3% of U.S. advertising spend, despite a 12% share of media consumption.

Paired with a less egregious drag in Web ad spend, closing this gap represents a $20 billion opportunity, said Meeker, speaking at AllThingD’s D11 conference. 

Meeker’s analysis implies that ad spend and consumer time spent by media should naturally equate. But we believe that assumption is flawed.

Yes, print ad spending is still too high, but maybe there’s a reason advertisers have been slow to change: print readers tend to be highly engaged (i.e. there are less distractions) and older, which translates to more spending power.

Advertisers don’t only care about garnering eyeballs, they care about effectiveness.

Ironically, Meeker’s presentation itself provides a strong argument against mobile advertising. On another slide, Meeker posits that we make contact with our phones 150 times a day, indicating that most interactions are short-lived and episodic — not necessarily suitable for advertising.

However, to be exact, we don’t reach for our phones 150 times a day. We may interact with our phones 150 times a day, but its fair to assume that most consumers don’t pull out their phone for each and every individual interaction.

Sometimes they may check the time and subsequently make a call without putting the phone back in their pocket.

So even if we say that we reach for our phones 75 times a day, it still implies that most interactions last for minutes at most. Other mediums, including print and TV, tend to be used for many minutes and even hours in a single session. 

Mobile advertising will indeed continue to rise, but to assume it will naturally catch up with audience time spend is overly simplistic. 

Click here to view a larger version of this chart.

BII 2012 Consumer time spent by media

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