Mary Meeker report finds that marketers aren’t yet tapping the opportunity that mobile advertising presents
Mary Meeker, the ex-Morgan Stanley analyst and a partner at capital venture fund Kleiner Perkins Caulfield Byers (KPCB), has just released her latest Internet Trends 2016 report.
The findings highlight that mobile ads are sparking much of the online ad industry’s growth, but marketers aren’t yet spending enough.
Smartphone units shipments are now slowing down, after five years of steady growth.
Smartphone sales rates slowing down
Driven by mobile, US internet advertising is on the rise, up 20% compared to 16% the year before.
USA Internet Advertising, 2009 – 2015
Facebook ad revenue jumped 59% from 2015 compared to 18% at Google and 13% for others. As we know, the majority of that Facebook revenue is due to mobile ads.
Advertising Revenue and Growth Rates (%) of Google vs. Facebook vs. Other, USA, 2014 – 2015
This growth is not enough though as advertisers remain over-indexed to legacy media instead of mobile. Mobile presents a $22bn opportunity for the US. As 25% of US consumers now spend time in-mobile versus 36% on TV, a total 12% of mobile ad spend seems to undercut the opportunity at hand.
Percentage of Time Spent in Media vs. % of Advertising Spending
However, the report also highlighted that online video ads were ineffective with 81% of people muting them, 62% annoyed by pre-roll ads and another 92% having considered ad-blocking software.
Indeed, ad blockers are in higher demand than ever before. Particularly the use of mobile ad blockers has surged over the last year.
Global Adblocking Users on Web (Mobile + Desktop)
However, video ads can work as long as they are authentic, entertaining, and evoke an emotion.
Interestingly, Meeker points to Generation Z as those communicating by image. Where Millennials have grown up using text messages and text-based apps, Generation Z utilises Snapchat to ‘talk’ to each other.
Over three billion images are being share daily on Snapchat, Facebook, Facebook Messenger, Instagram and WhatsApp and monthly active users across these platforms have been steadily growing
Monthly Active Users on Select Social Networks and Messengers, Global, 2011 – 2015
Meeker also showed that marketers and businesses alike should vary their communication tools according to age group. Generation Y prefers to be contacted via the Internet and on Social media, whilst Generation X, Baby Boomers and the Silent Generation all favour telephone communication.
Popularity of Business Contact Channels, by Age
Whilst Meeker didn’t explicitly mention the growing trend of bot usage, Blaise Zerega, writer at VentureBeat argues that she validates them in her research. Indeed, bots are becoming incredibly useful in powering automated advertising and chat features and are already hailed as the future of mobile marketing.