'Mobile advertising remains a billion dollar opportunity, smaller digital agencies are moving quickly' says WPP chief Sorrell
Despite years of promise, mobile advertising has still not developed in to a full-fledged advertiser medium, because inadequate technology is causing advertisers to hold back on spending, according to the boss of the world’s largest ad agency holding group, WPP chief executive Sir Martin Sorrell.
Sorrell noted that agencies who claim the first thing they do is mobile may not be entirely accurate. Speaking to Beet.tv, he also predicts a rising influence of smaller, digital agencies, which he sees as moving most rapidly into the mobile space, coming through the digital door and expanding their relationships with clients.
"These companies are increasingly attacking the mobile space," he said. "It is a multi-billion dollar opportunity that is still untapped."
Speaking at Mobile World Congress, Sorrell added the famous mobile ad spending gap is still far from being closed.
“People are spending about a quarter of their time on mobile, and yet it only accounts for around 12% of spending,” he said. “That’s out of kilter and it has to change.”
So, why is spending still lagging behind usage? Sorrell blames the tech.
“Technology, bandwidth, the devices, the screens are not big enough, not good enough yet,” he commented. “There’s a lot of technological development to come.
Magna Global estimated global mobile ad spend grew by 48% in 2016 to hit $80b in 2016, representing 45% of total digital ad spend and 16% of total ad spend. But the group expects strong growth, rising to 72% of digital and 36% of the total by 2021.
That is the fastest growth of any ad medium, surely enough to delight Mobile World Congress veterans who long remember predictions of the arrival of “the year of advertising."
Yet Magna Global also said a key growth drivers has simply been dollars moving from desktop, a channel now plagued by ad blocking on top of deteriorating effectiveness.
Sorrell is looking to technological evolution to make mobile advertising a more attractive proposition in its own right.
“5G will obviously be important,” he adds. “In India, we’ve seen the explosion of 5G, with Mukesh Ambani launching 5G having invested $16bn without receiving a dollar of revenue. Facebook and Google tell me (about) the utilization rates, the graph looks (vertical) – they’ve never seen any country in the world with such penetration so quickly.”
While attending Mobile World Congress, Sir Martin also cited Amazon as the biggest threat to Google's advertising spend strategy.
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