Mobile Ads Forecast To Rival Desktop, Metrics Key

The post-PC era is here.

With a third or more of their traffic coming from devices, large Web publishers are scrambling to monetize the rapid influx of mobile inventory. An eMarketer forecast released Tuesday underscored the dramatic shift underway, predicting desktop ad growth will top out next year at about $35 billion before gradually declining to $32.5 billion by 2017.

Conversely, mobile ad spending will jump from an estimated $7.7 billion this year to $28 billion in four years, nipping at the heels of traditional Web spending. In 2013 alone, mobile will spike 75% compared to just 6% for the desktop as publishers look to shift ad dollars to mobile devices and advertisers' growing m-commerce sales.

Ad executives acknowledge the changes reverberating through the digital landscape. “We believe that standard digital display will peak in the next few years as mobile connections ultimately surpass desktop connections,” said Doug Rozen, chief innovation officer and senior vice president, general manager at MXM Mobile, Meredith Corp.’s integrated marketing unit.

At present, Rozen sees the biggest mobile opportunity in search as marketers use it as a tool to drive mobile Web interaction. eMarketer projects mobile search advertising will surge 76% this year, and 52% in 2014.

For Google, already the dominant player in mobile search, that means search revenue from mobile will approach the desktop by 2015: $7.1 billion to $10.3 billion. Mobile ads still command lower prices than desktop ads.

Not everyone sees the mobile shift as a zero sum game with the desktop Web when it comes to advertising, especially on the display side. “My initial reaction is that it’s overstated,” said Adam Kasper, chief media officer, Havas Media, North America, of the eMarketer forecast. While mobile is growing faster, especially given that it’s starting from a smaller base, he believes desktop ad spending will continue to grow alongside it.

Kasper suggests mobile is taking more budget from traditional media, like print and local broadcast TV, rather than the PC-based Web. He also notes that media is increasingly being bought across platforms, making device-based distinctions less meaningful. “You’re doing a buy with a publisher that can run anywhere and optimizing for KPIs across screens,” he said.

That’s what Google has in mind with its launch this year of AdWords Enhanced Campaigns, which allows advertisers to merge desktop and mobile-optimized ads in a single buy, relying on context to deliver the right type of ad. But the updated system doesn’t power mobile-only campaigns -- the desktop is still the AdWords foundation.

Jeremy Lockhorn, who leads the emerging media practice at Razorfish, pointed out that a newer crop of devices is blurring the lines among PC, tablets and mobile screens. That includes Microsoft’s Surface and other “convertible” ultrabooks. Add to that so-called “phablets” like the Galaxy Note, whose screen sizes place them somewhere between smartphones and tablets.

“This makes almost any prediction at spend by screen category an educated guess at best,” he said. Lockhorn also indicated that the eMarketer forecast may underestimate spending on the desktop for emerging video and native ad formats. Rozen also sees original video as a growing category on the desktop, providing content to rival traditional television, “but with better targeting options.”

Regardless of media type, measurement will remain a key issue for the digital industry to tackle as advertising expands across devices. Both comScore and Nielsen tout rival systems for tracking online campaigns across platforms, but a standard, unified set of metrics is still a work in progress.

In that vein, Wade Rifkin, vice president, media director at Digitas NY, said any cannibalization of desktop ad dollars by mobile “is going to be predicated on required cross-platform measurement advances that let us prove out the efficacy of mobile over the much more established, though still imperfect, desktop channel.”

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