Time Spent In Mobile Far Outpaces Ad Spending

Web publishers have long lamented the lack of ad spending online in relation to the amount of time spent online. Now Flurry is making the same case for mobile. In a new study, the mobile advertising and analytics firm says mobile is the most imbalanced medium when it comes to ad spending versus time spent, at 1% compared to 23%. That makes the split of ad spending and time spent on the desktop Web -- at 16% versus 22% -- look a lot better.

By contrast, print gets 29% of ad dollars but only 6% of time spent. Flurry derived the cross-media figures from publicly available sources including comScore, Veronis Suhler, Mary Meeker, Alexa and its own data tracking more than 140,000 iOS and Android apps.

So why is mobile getting short-changed in ad budgets?

“We believe the main reason for this disparity is that the mobile app platform has emerged so rapidly over such a short period of time. With the iOS and Android app economy only three-and-half years old, Madison Avenue and brands have yet to adjust to an unprecedented adoption of apps by consumers,” stated a blog post Monday by Peter Farago, VP, marketing at Flurry.

Prior research by the firm found that iOS and Android smart devices have seen twice the growth rate as that of Internet adoption and four times that of PC adoption. Farago also notes that mobile advertising lacks sophisticated platform tools, standard metrics and an established standard for ad-serving, tracking and settlement that make ad buying easier in other media.

If mobile follows the same pattern as the desktop Web, that disparity between ad dollars spent and time spent should shrink over time as the audience grows and the metrics and practices around mobile advertising become standardized. But since mobile is inherently more fragmented than the Web, and offers an even smaller screen to advertisers, there may always bee a sizeable gap between spending and time spent.

The Flurry study also looked at which mobile audience segments are most receptive to advertising -- data from its own AppCircle ad network. Specifically, it used a sample of 60,000 daily active users on iOS devices. Using eCPMs as a proxy for audience value, it found that younger, more affluent and better-educated people were more likely to interact with mobile ads.

Women ages 25 to 34 generated especially high eCPMs -- $12.92 -- relative to males and females across other age categories. And women were generally more attractive targets across adult age groups than men, as measured by the eCPMs they fetched. In terms of income, those in households earning $80,000 to $100,000 were considered the most desirable ($8.28 eCPM). By education level, sdvertisers were willing to pay the most to reach people with a bachelor’s degree ($7.92).

“What bodes best for the outlook of mobile advertising is the quality and quantity of the audience that not only uses smartphones and tablets, but also interacts with ads on these devices,” according to Farago. “Actionable data and well-built platforms are the keys to unlocking Madison Avenue spending.” Sounds simple, right? But the same arguments are still being made by online ad proponents to get Madison Avenue to spend more on the Internet.

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2 comments about "Time Spent In Mobile Far Outpaces Ad Spending".
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  1. John Grono from GAP Research, February 21, 2012 at 5:40 p.m.

    The gross majority of my time-spent on my mobile is either talking on the phone, reading an email that has just arrived, or searching online for something that I need to know urgently. Yep - in NONE of these scenarios do I want advertising interferring. Maybe that has something to do with the alleged imbalance. I am amazed that some people think that it is axiomatic that time-spent should have a 1:1 ratio with ad dollars. If that were that case 'sleep-advertising' would capture a quarter to a third of all ad dollars - and what a ludicrous proposition that would be.

  2. Kavita Vazirani from Comcast Cable Communications, February 24, 2012 at 7:13 a.m.

    Agree John. Also, advertising is a supply/demand marketplace. A 1:1 ratio is not going to work in this marketplace.