Dive Brief:
- ZenithOptimedia has revised its forecast for advertising, with the latest report predicting that spending on mobile ads will now overtake desktop in 2017 instead of 2018.
- Mobile advertising grew 95% in 2015 with 46% growth expected this year and 29% growth in 2017 and 2018, according to the report. The report points out that mobile has already become the primary means for many people in accessing the internet.
- Traditional display advertising, such as banner ads and other similar formats, which areis expected to decrease 3.1% this year, compared to 8% growth in 2015.
Dive Insight:
The rapid expansion of mobile is happening at the expense of traditional display advertising. The report does see some growth for display over the next two years, but not enough to make up for the ground lost this year: Online display is expected to grow 0.3% each year from 2015 to 2018.
The report highlights the challenge facing desktop advertising, suggesting that its peak occurred in 2014. But "as advertisers switched their budgets to mobile ... [w]e now expect desktop advertising to decline for the rest of our forecast period." By 2018, desktop will make up only 42% of desktop ad spend, according to the forecast, while mobile will make up 58%.
The estimates are backed up by the numbers found in Mary Meeker’s recent 2016 Internet Trends report, in which Meeker argues we are now living in a mobile-first world. But as Meeker points out in her report, mobile remains under-used by marketers. While people are spending 25% of their time looking at mobile devices, marketers are only spending 12% of ad dollars on mobile, a $22 billion gap.
The clear takeaway for marketers is that advertising strategies and budgets should be reevaluated to see if more ad dollars can go to mobile and out of desktop display. Marketers need to conduct research and testing of their own to make sure their audience is engaging on mobile devices before making these kinds of budget decisions, but that research should be the first order of business in order to optimize ad spending.