Mobile Surge To Boost Total U.S. Ad Spending 5% This Year

Steep growth in mobile advertising will help push total U.S. ad spending this year to its biggest increase in a decade, according to a new eMarketer forecast. The 83% rise in ad spending on smartphones and tablets will see overall media ad sales increase 5% to $180 billion -- the largest gain since a 6.7% uptick in 2004.

By year’s end, mobile will represent 10% of all media ad dollars, surpassing newspapers, magazines and radio for the first time to become the third-largest category behind TV and PCs. eMarketer estimates mobile advertising will increase to $17.7 billion this year from $9.7 billion in 2013.

The Interactive Advertising Bureau (IAB) estimated U.S. mobile ad revenue in 2013 lower, at $7.1 billion.

TV advertising will grow only 3.3% ($2.2 billion) this year, but will easily command the largest share of ad dollars, at 38.1% compared to digital (including mobile) at 28.8%, print (17.7%), radio (8.6%) outdoor (4%) and print directories (3.5%).

The report attributes the surge in mobile advertising mainly to the growing amount of time spent on smartphones and tablets. Last year, time spent on mobile devices and desktops and laptops was equal, at 2 hours, 19 minutes. That total on PCs is expected to dip this year to 2:12, while will mobile time will increase significantly.

For the first time this year, advertisers will spend more than $50 billion in digital, with mobile making up about a third of that total. By 2018, eMarketer projects mobile will account for more than 70% of digital ad spend.

Google and Facebook in particular have capitalized on the growth in mobile advertising to boost revenue. By year’s end, mobile will make up 68% of Facebook’s total U.S. ad sales, while Google's will not flip to a majority for mobile until 2016. Mobile this year is estimated at more than a third (36.8%) of the search giant’s U.S. ad revenue.

Google itself -- in a letter to the SEC last December about the reporting of its mobile ad revenues -- said it considers “mobile” to include only handsets and not tablets, given that the way people use the latter is more akin to PCs. Accordingly, Google allows a single bid for desktop and tablet buys through its Enhanced Campaigns tool launched last year.

An eMarketer spokesman said its mobile ad forecast encompasses smartphones and tablets because most advertisers and publishers still include the two types of devices as “mobile” because of their operating systems and technical capabilities. He added that Google’s definition of the term, excluding tablets, doesn’t change that approach, especially since the company does not separately report mobile revenue. 

The eMarketer report projects Google alone this year will garner 10% of all U.S. media spending, with the search giant and Facebook together making up about 15% of the total $200 billion market in 2016. The company says its forecasts are based on economic and other trends, as well as data from various research firms, government agencies, media outlets and other sources. 

"Using Smartphone" photo from Shutterstock.

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