Ad spend lags eyeballs as UK declared a ‘smartphone society’
Smartphones have overtaken laptops as the primary device for internet access, with 66 per cent of the UK population owning such a device, according to Ofcom, which poses advertisers with further complications when it comes to balancing their marketing mix, hence the ad spend is just not following suit.
Ofcom’s 2015 Communications Market Report released today this week found that 33 per cent of internet users see their smartphone as the most important device for going online, compared to 30 per cent who are still sticking with their laptop. This is compared to 12 months earlier when just 22 per cent turned to their phone first, and 40 per cent preferred their laptop.
On average, smartphone users spend two hours a day browsing the internet on their wireless devices; twice as long as they spend doing so on their laptops and PCs, according to the study, which surveyed how the public consume content, both online and via terrestrial media.
Smartphones not just a ‘youth thing’
The study found that the vast majority (90 per cent) of 16-24 year olds own a smartphone, and that 50 per cent of those aged 55-64 year olds also own such a device – up from 19 per cent in 2012. This surge in ownership has been driven by the introduction of 4G telecoms networks in the UK (which started to roll out in 2012), with over 23.6 million subscribers to such services, as of March 2015.
Further analysis of mobile users also found that 55 per cent of 4G subscribers buy goods on their smartphones, compared to 35 per cent of those who don’t subscribe to such high-speed networks.
Connected TVs lag smartphones and tablets
Such services are also spurring content viewing on smartphones, with almost half (45 per cent) of 16 to 24 year-olds watching up catch-up programmes on either a smartphone, tablet, or laptop, compared to 40 per cent that view this form of content via connected TVs, or a set-top box.
Sharon White, Ofcom chief executive, said: “Today’s report shows just how important reliable, fast internet access is to millions of consumers and businesses. Improving the coverage and quality of all communications services across the UK is a priority for Ofcom, for people at work, home or on the move.”
James Thickett, Ofcom, director of research, added: “4G has supercharged our smartphones, helping people do everything from the weekly shop to catching up with friends with a face-to-face video call. For the first time, smartphones have overtaken laptops as the UK’s most popular internet device and are now the hub of our daily lives.”
Ad spend not following the eyeballs
Despite smartphone’s ever-increasing share of audiences’ attention, they are failing to attract ad spend in the same amounts as TV screens.
A recent forecast by Publicis Groupe’s Zenith Optimedia demonstrates that global audiences will spend an average of an hour a day consuming video on mobile devices, showing just how advanced UK audiences are when it comes to such behaviour.
However, ad spend figures recently released by the Advertising Association and WARC reveal that spend on TV (£4.9bn) still dwarfs the amount spent on digital (£1.6bn), see chart.
Longer purchase journey
Commenting on the Ofcom research, Mark Haviland, managing director of Rakuten Marketing, Europe, added: “This report confirms that mobile is the preferred device for consumers online. However many retailers are delivering marketing campaigns that don’t address this; IAB research shows that just 10 per cent of the top 250 UK brands are running display advertising campaigns without a mobile optimised site. It’s crucial that marketers respond to Ofcom’s research and change their approach to match how people are consuming the internet.”
Haviland went on to explain that marketers have been slow to include mobile in their marketing mix given the difficulty in attributing value to mobile media, given that most mobile internet users consume media as part of a longer purchase journey, i.e. they may spend a lot of time researching a purchase on their phone, but then actually complete the purchase on another, and making the link between the two is not always easy.
He added: “Marketers must realise the value of mobile as a facilitator for commerce on other channels. Only with an omnichannel approach and optimised, targeted advertising, can marketers provide a seamless and consistent customer experience and make the most of this mobile boom.”
Shifting attitudes among advertisers
Reports emerged earlier this week that the social network had reversed its earlier plans to limit the device-level data – i.e. the device IDs - to advertisers that booked mobile ad campaigns on the social network, after protests from some of its biggest spenders.
Such a move would have limited advertisers’ ability to adequately put a cap on the number of times they served an ad to the same users when booking elements of their campaign outside of Facebook’s ecosystem.
Commenting on the latest reports Mike Manning, a Facebook spokesperson, told The Drum: “We want advertisers to evaluate Facebook ads based on how well they're achieving business objectives. We advise our advertisers to apply people-based measurement solutions so they can determine when they're reaching multiple people, not just multiple devices.
“While we believe device-level reporting is not the most accurate way to properly determine advertising effectiveness, we want to provide advertisers with the choice to measure ads based on what is important to them. In order to provide that choice, we will continue giving advertisers the option to receive device-level reporting from our mobile measurement partners for mobile app ads.”
Given that over three quarters of Facebook’s revenue is generated by mobile advertising, this amounts to a significant climb down, and demonstrates that advertisers are starting to realise the importance of mobile elements of their campaigns.
With global mobile ad spend set to top $100bn by the close of next year, then it is crucial that the advertising industry reaches more of a consensus on how to track mobile users across screens, therefore making it easier for media planners to incorporate mobile into their wider marketing mix.