the future of mobile ads
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The Future Of Mobile Ads. Henry Blodget CEO, Business Insider June 14, 2012. Henry Blodget Founder, CEO & Editor-in-Chief, Business Insider. Matt Rosoff , Editorial Director. Pascal-Emmanuel Gobry , Senior Analyst. Alex Cocotas, Analyst. Something profound happened last year…. - PowerPoint PPT PresentationTRANSCRIPT
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The Future Of Mobile AdsHenry BlodgetCEO, Business InsiderJune 14, 2012
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Henry BlodgetFounder, CEO & Editor-in-Chief, Business Insider
Pascal-Emmanuel Gobry, Senior Analyst
Alex Cocotas, Analyst
Matt Rosoff, Editorial Director
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Something profound happened last year…
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Smartphone sales overtook PC sales
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And will soon DWARF them…
We are here
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Already ~1B smartphones, and still early in conversion cycle
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(The U.S. is more than halfway there…)
Source: Pew Research Center
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Smartphone “demo” is young and rich (but will soon be everyone)
Source: Nielsen, January 2012
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Tablets also a form of “mobile” and will also blow past PC sales…
We are here
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Time spent on mobile is rising fast
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Mobile web traffic now 10% of total
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More than half of Pandora and Twitter usage is now mobile
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Facebook ~500 million mobile users
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So mobile ads must be huge, right?
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Nope.
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Mobile ads are still pretty small (~$1.25 bn in U.S. last year)
We are here
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That’s a fraction of digital ad spending
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And most “mobile” ads are just web search + display ads viewed on mobile
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So why aren’t mobile ads bigger?
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Mobile monetization trails desktop
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Mobile CPMs are lower
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“Ad spending hasn’t caught up with time spent.”
Source: Mary Meeker (KPCB), eMarketer, IAB
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Most people say this is because “mobile is in its infancy”
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But that’s actually not true.
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Mobile is already 5 (or 17) years old.
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Mobile ads have grown much slower than TV, Internet in the first 5 years
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So maybe there are other challenges here…
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The screen is really small…
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Smartphone users really don’t like intrusive ads
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Ads on smartphones may not be particularly effective…
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But still…
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It takes a while to figure out how to use new media…
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The future of the Internet is mobile
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Even sober analysts expect big growth…
We are here
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And “native” mobile ad formats are emerging…
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SMS ads The original mobile ad
Niche market, little growth expected as market evolves and matures
Ineffective, intrusive
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Mobile display ads Similar to banner ads on
desktop, but much smaller and much cheaper Inventory is currently huge
Apple’s iAds are more interactive Can download the app directly
from the ad
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Click-to-call ads New feature for regular search
ads
Convenient for user, makes use of phone’s native features
Clear ROI for advertisers
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Twitter Mobile Ads Success with mobile promoted
tweets
Mobile revenue surpassed web revenue on many days last quarter Dick Costolo, June 2012
Of estimated $250 mm 2012 revenue, ~$125 mm will be mobile
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Pandora Mobile Ads Mix of display, audio, and
video ads
Mobile ads now account for 50% or more of quarterly ad revenue
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Facebook Mobile Ads Just released “Sponsored
Stories” for mobile
Brands can turn an action by a user into an ad
Facebook has ~500 million mobile users, but virtually no mobile revenue
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The Holy Grail: geo-located ads Take advantage of phone’s
GPS to offer something desktop can’t
Difficult to match the right inventory with consumers based on location
Groupon Now is a form of real-time local advertising
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Some key mobile trends…
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People spend more time on apps than they do browsing the web
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Games and social are the big apps
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Games sessions up 20-x in 2 years
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Social and gaming get most of the ad spending
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Photo and video apps huge, too
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And people are watching more long-form, ad-friendly content
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Mobile web audiences surging
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Affluent consumers get highest CPMs
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Women a more desired demo than men
Source: Flurry Analytics
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Some content categories are more desirable than others
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Tablets, by the way, are more promising for ads…
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Tablet owners more receptive to ads
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Tablets ads more effective
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People consume a huge amount of content on tablets
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So tablets ideal for ad-supported media
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And here’s a key point…
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People use their smartphones for shopping
Source: comScore MobiLens, 3 mon. avg. ending Dec-2011, U.S.
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Mobile commerce is exploding…
30% of Gilt’s Black Friday revenue was from mobile sales
Boston Globe, Dec 2011
38% of U.S. consumers have used smartphones to buy products or services
comScore, Dec 2011
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So, instead of thinking of mobile as an “ad platform”…
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Maybe better to think of it as…
“Marketing, communication, and sales channel”
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One thing is certain…
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The future is mobile!
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Thank you!