When will mobile ad revenue reflect time spent?

Two years ago the buzz was that mobile was the next big thing, and now that consumers are moving to tablets and smartphones, the moment has arrived.

Nielsen says that 50.4% of mobile users now have a smartphone.
More than two-thirds of those in the 25-34 age group have a smartphone. The report is here.

This slide from Mary Meeker of Morgan Stanley shows
the opportunity for mobile advertising. Although consumers spend
10% of their time with media on mobile platforms, mobile
is getting only 1% of the ad revenue, a $20 billion opportunity.

If your news product doesn’t have a user-friendly mobile version that can follow the audience where it wants to go, it will go elsewhere. The advertising will follow. Maybe.

Three media business analysts have slightly different takes on the graphic above presented by Morgan Stanley analyst Mary Meeker.

Derek Thompson of The Atlantic notes that print publications are getting 25 times more ad revenue than mobile devices, considering time spent with each medium. Does that mean that advertisers think print is 25 times more valuable, or is it just that they haven’t caught up with the audience yet?

Mathew Ingram of Gigaom and Rick Edmonds of Poynter both have posts that predict print will continue to lose advertising market share to the internet when advertisers follow the audiences there.

But they may not migrate to the degree the chart suggests. Edmonds points out that advertisers might simply be making a decision on the effectiveness of advertising in print vs. digital:

Meeker’s big picture measure seems to me to suffer from one critical oversimplification: the notion that advertising is more or less equally effective by platform. Give digital its due with the obviously potent search ad format, but display advertising is a different story entirely.

Newspaper, magazines and television each offer mature formats with particular strengths that advertising professionals know how to exploit. By contrast, way too big a share of digital display consists of banners easily ignored or various pop-up formats that annoy more than they sell.

Ads as stories, games

Here in China, where I am bombarded with annoying, poorly designed ads on my smartphone, I wonder if the revenue will ever reflect the proportion of time spent. The ads are too small to show a product effectively. And I wonder if ads for a smartphone format can be redesigned some way to make them more effective and less intrusive.

The future for mobile advertising might be with video formats that tell stories or with games, none of which I would spend much time with but which might be attractive to younger users.

I have a feeling that China and Asia might be the leaders in these formats. Mobile use is more intense here, and some of the wild innovations seen here might turn out to be the ones that lead the pack globally.

Tags: advertising, Derek Thompson, English, Internet, market share, Mary Meeker, Mathew Ingram, mobile, newspapers, rick edmonds

James Breiner: Entrepreneurial Journalism

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