Companies See Mobile Ad Potential

Mobile advertising spending more than doubled in the first half of 2013, with the INTERACTIVE ADVERTISING BUREAU estimating U.S. mobile-ad spending totaled $3 billion in the first half of the year, compared with $1.2 billion in the first half of 2012, reported THE FOOD INSTITUTE.

Mobile advertising spending more than doubled in the first half of 2013, with the INTERACTIVE ADVERTISING BUREAU estimating U.S. mobile-ad spending totaled $3 billion in the first half of the year, compared with $1.2 billion in the first half of 2012, reported THE FOOD INSTITUTE.

Some ad agencies see the shift to mobile as an obvious move, since Americans are on mobile devices more than ever. U.S. adults are expected to spend two hours and 21 minutes a day on mobile devices, like smartphones and tablets, according to EMARTKETER, while in 2010 they spent 24 minutes on mobile devices. 

UNILEVER expects to spend three times more this year on mobile ads than it did last year. The company also stated that 50% of its FACEBOOK ad spending goes to the social-network’s mobile products. 

MONDELEZ INTERNATIONAL is also focusing part of its advertising efforts to mobile ads. In 2013, it will devote 10% of its global marketing budget to mobile advertising. The snack company stated that its Nilla Wafers mobile ad campaign on Facebook increased the retail sales of the cookie 13% in July. 

Facebook has been benefiting from the shift to mobile ads. The company stated that mobile ads accounted for 41% of its advertising sales in the second quarter. Facebook will also have 14.9% of the mobile ad market this year, according to eMarketer.

EMarkerter estimated that GOOGLE will have a 46.8% share of the U.S. mobile ad market this year. This nearly half of the market share is due to its web searches on mobile devices. The company was ahead of the curb in 2007 when it created the ANDROID mobile system and recently, when it acquired WAZE, a mapping and navigation app which supports pinpoint advertising. This advertising was used by Mondelez who promoted Stride gum by pointing out the closest TARGET location and by sending the smartphone user a coupon. Mondelez stated that about 2.3% of app users clicked on the link and received the coupons. 

During the first half of 2013, U.S. online spending rose 18% to $20.1 billion compared with the same period last year. This number, however, is a fraction of what U.S. companies spend on TV ads. EMarketer predicts TV ads spending will increase 2.8% to $66.35 billion. 

This new form of advertising brings many challenges. Internet browsers on a computer use “cookies,” which allow advertisers follow the user as they browse the web. Mobile devices don’t support “cookies.” There is no standard to track mobile users and the industry is still working on finding a way to give advertisers the data they need.

Another challenge mobile ads face is customer feedback. Many customers view mobile ads as annoying and cluttering. Two-thirds of people stated that mobile ads were more annoying than TV ads and 70% stated that in-app ads are “interruptive,” according to a study by FORRESTER.