Commentary

Search, Display Ad Revenue Will Make Cyber Monday Obsolete: Part 1

Collage-Tablet-SmartphoneCyber Monday originally got its name after most Americans were stuck at home during the four-day weekend using slow Internet access through hardwired telephone lines. Back to work on Monday following the holiday meant having access to faster broadband connections, so brands promoted Cyber Monday as a day to buy online.

Aside from faster home broadband and cellular phone connections, the proliferation of tablets that allow consumers to multitask from their couch on Thanksgiving Day, or smartphones that support the on-the-go deal warrior, this antiquated day will go the way of the dinosaur. 

Ninety million people in the U.S. owned smartphones during the three months ending Oct. 31 -- up 10% sequentially, according to comScore. The data firm said Google Android ranked as the top smartphone platform with 46.3% market share, up 4.4 percentage points from the prior three months. Apple retains the No. 2 position, growing 1.0 percentage points to 28.1% of the smartphone market. RIM ranked No. 3 with 17.2% share, followed by Microsoft at 5.4% and Symbian at 1.6%.

Aside from the uptick in mobile phone use, tablets contributed to the increase in sales by changing consumer behavior. Google found that tablets have become multitasking devices, with more than 42% of activities occurring while doing another task or engaging with another entertainment medium.

Overall, online sales have been strong. In the first 28 days of this year's holiday shopping season, consumers spent $15 billion, according to comScore. On Thanksgiving Day -- traditionally a light online shopping day -- consumers spent $479 million, up 18% compared with last year. Consumers spent $816 million on Black Friday, up 26% compared with a year ago.

About 10 million people bought online Cyber Monday, according to comScore. The average online buyer conducted 1.9 online transactions on Cyber Monday for a total of nearly $125 in spending.

Yes -- online shopping has begun to evolve, thanks to faster broadband access at home and cellular service through smartphones and tablets. Citigroup Analyst Mark Mahaney expects the U.S. search advertising market to take $15 billion in 2011, up 26% year-on-year. In a research report he explains why he believes search will comprise about 48% of total ad spend this year, up from about 46% in 2010. The catalyst, in part, belongs to record Black Friday and Cyber Monday sales driving up ad revenue.

Based on strong IAB Q3 2011 online advertising results that point to 22% growth leading to 7.88 billion in ad revenue, Mahaney increased the 2011 forecast to $31.5 billion, up 21% year-on-year. He also changed growth estimates from 15% to 17% for 2012, as well as from 12% to 14% in 2013.

Stay tuned for Part 2.

Next story loading loading..