Everyone has been predicting that next year would be the year that overall mobile ad spend was going to surpass desktop ad spending, but it appears the timeline may be accelerating. In a new report from eMarketer, they calculate that Mobile programmatic display ad spending will account for 60.5% of total U.S. Programmatic display ad spending this year, to the tune of $9.33 billion.
It is highly likely that this push to Programmatic display ads is due to fears that mobile ad blocking (pioneered on mobile by Apple) will catch on with consumers. Marketers are attempting to create a better more personalized ad experience that consumers won’t be so quick to block.
Despite the uncertain marketplace, it seems it won’t prevent marketers from spending on mobile display ads. According to a recent survey by Ad Age and RBC Capital Markets, 71% of marketers are spending on mobile, with 36% of marketers allocating over 10% of their online budgets to mobile. Survey respondents also said that they believe mobile has the biggest opportunity to increase programmatic spending.
Leading this charge is Facebook, the ultimate programmatic platform. According to eMarketer, Facebook’s U.S. mobile revenues are expected to reach $5.89 billion this year and reach $10.32 billion by 2017. Facebook’s influence won’t stop there though “as both mobile web and app publishers increasing look to redesign their sites in the style of Facebook’s popular in-feed units.” according to Lauren Fisher, programmatic analyst at eMarketer. however this does not mean that Facebook will play a reduced role in further advertising, just that the popularity and success of these types of units on Facebook will fuel their growth and adoption on other sites with other publishers.
But what types of ads can we expect to see emerging from this swift change? According to eMarketer, the largest growth will come on the form of video ads over the next two years. But that’s in part because it’s not a huge portion of the programmatic spend spend right now. Video mobile programmatic is estimated to reach $1.14 billion in 2015 and up to $3.79 billion by 2017. Those are some staggering numbers, but even at that volume video will still only account for 18.5% of the U.S. mobile programmatic display ad spend.
That is not to say that everything is sunshine and rainbows in programmatic land, there are still several challenges left to overcome, such as inventory quality and viewability. Mobile advertising has its own set of issues that can help contribute to ad fraud, including the fact that location isn’t always accurate, and that the software cookies that help track web surfers on desktop computers can’t follow users from app to app. Efforts to counter that or at least give marketers some help include the Mobile Seller Trust Index from anti-ad fraud firm Pixalate, which describes the index as an independent, standardized rating system of ad exchanges’ fraud activity.
So what does this mean to the average mom and pop shop in the Midwest? In short, it means that it is time to adapt your marketing efforts. If you are still reliant on basic display advertising, know that your competition is out there, gathering intelligence on your customers. Your competition is taking that information and using it to tailor specific ads for your customers that take into account their age, location, and interests to deliver the right ad at the right time.
Understanding Programmatic Display Ads can be confusing, and we are always here to help! give us a call at 316-260-5391 or send us a message here. We can help you understand the fast paced world of marketing, and even help you set up your first Facebook ad campaign!