The good news is that media consumption will expand markedly over the next five years, rising from about 74.5 hours weekly per person currently to about 80 hours weekly in 2017. The bad news for Madison Avenue is that almost all of that growth will be coming from a medium that has proven vexing for advertising: Mobile.
“It’s pretty staggering,” said Brian Monahan, managing partner of the intelligence practice at Interpublic’s Magna Global unit, referring to its new projections for media consumption, and the fact that so little of it is proving monetizable as an advertising medium.
“Consumers are just so far out ahead of advertisers in terms of their use of mobile media,” he told Online Media Daily on the eve of Tuesday’s release of the latest edition of its periodic Media Economy Report during the CES conference in Las Vegas.
The report, which is subtitled “The Ultimate Mobile Deep Dive,” not surprisingly focuses primarily on the impact mobile is having in the overall media economy. The report finds that mobile may also be Madison Avenue’s ultimate paradox, because instead of growing as a percentage of the time consumers spend with mobile media, advertising will actually decline over the next five years for a variety of reasons -- including the fact that the ad industry has yet to develop a truly scaleable model for advertising on mobile devices.
“It’s the biggest delta between time spent and ad spending,” Monahan said of the margin between consumer use of mobile media and mobile’s share of advertising budgets. “And we expect that to widen over the next five years, not narrow.”
Even more remarkable is the fact that mobile will lose share of total advertising spending, even as it has emerged as the fastest-growing advertising medium.
According to Magna, mobile currently accounts for 1.3% of worldwide ad spending and will rise to 3.3% by 2017, thanks to a projected 30.6% rate of growth over the next five years. By comparison, total ad spending on all media will expand only 5.2% over that period, according to Magna’s latest forecast.
The problem, said Monahan, is that consumer time spent using mobile media will rise at an even faster rate over that period, accounting for a greater percentage of media consumption, but a lower share of total ad spending.
Mobile’s ad share paradox is even more striking when you consider the relative cost efficiency, consumer attentiveness and low advertising clutter. The CPMs, or cost of reaching a thousand consumers, via mobile advertising, currently averages only $1.31, according to Magna. By comparison, broadcast TV averages $29 and newspapers average $51.
Monahan said that disequilibrium likely will continue until several factors are resolved, including developing advertising models and formats for capturing consumer attention with ads while they are on mobile devices, and for measuring, targeting and serving ads to consumers exposed to them.
“Therein lies the billion-dollar question,” Monahan said, adding, “What is the ad model going to be?”