Mobile advertising is full of oddly incongruent trends.
Consider, for example, how time spent on mobile is growing fast, up 23 percent in 2014, as adults devote less attention to other media. But mobile ad spending has lagged far behind. According to eMarketer, major media ad spending on mobile in the U.S. was just 7¢ for every hour that an adult spends on mobile, in sharp contrast to print, where the ad spend was 83¢ for every hour that an adult reads newspapers or magazines, and 17¢ for every hour of adult-viewed television.
Another surprising fact of the mobile ad market: Apple’s failure to capitalize on its dominance. Apple holds 40 percent of the U.S. smartphone market — not to mention brandishing a reputation for marketing savvy — but it makes up a negligible share of the mobile ad industry compared to the likes of Google (46.8% market share), Facebook (21.7%) and Twitter (2.6%). Launched in 2010, iAd has not made much of a dent in the advertising universe.
But given sufficient time and the right conditions, market imbalances tend to correct themselves. Mobile ad spending is expected to grow quickly in the US, for example, increasing 50 percent in 2015 to $28.48 billion (U.S.) and almost reaching $60 billion in 2018. Ad money is likely shifting out of print, television and other digital ad budgets. B2B budgets for mobile marketing are also on the rise, possibly in the range of 36 percent.
And as mobile ad spending rises, so do the stakes for Apple.
iAd Tries to Get in the Game
Recently, Apple forged partnerships that may finally breathe new life into iAd, its stagnant mobile advertising platform. As announced Nov. 21, iAd will providing a select cohort of ad tech companies with access to its ad inventory on more than 250,000 apps in over 100 countries.
Apple is embracing programmatic mobile advertising in hopes that the automated marketing platforms offered by the likes of MediaMath, Rubicon Project and AdRoll will help entice marketers to target 2 billion impressions across the world’s iPhones and iPads.
Will Apple’s move sway reticent marketers? Here a three key factors that should help it compete:
- Standard ad formats — Apple previously required specialized designs, but now it’s shifting to standard formats for mobile banners and videos that will make it easier to recycle what they have
- App store behavioral data — How would you like to know about which apps users download and which media each consumes? This kind of consumer data will now be available to target ads.
- App-install ads — This category of mobile ad, which allows users to begin downloading an app with a single tap, is already in high demand — eMarketer forecasts they’ll account for almost 25% of total U.S. mobile ad spend this year — and could be a new, better way for iOS app developers to get noticed among the right segment of users.
The rise of programmatic ad buying may yet allow Apple to at least take a small bite out of the mobile ad market. But a lot will depend on how committed its partners are to pushing iAd as a viable alternative.
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