It took only 6 years for mobile advertising to defeat PC and become the protagonist of digital advertising. What happened in the advertising market?
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Seven years ago, Apple iPhone 4 was released and Google launched Nexus One. Many advertising practitioners later realized that it was in that year that mobile Internet entered a stage of rapid development. The explosion of information was rapidly transmitted on the devices in everyone's hands, and the mobile advertising market, which would later be worth hundreds of billions of dollars, was born. In the past two years, advertising practitioners and media focusing on the advertising industry must have often seen news like this: Google mobile search exceeded desktop search; Baidu's mobile revenue exceeded PC; Procter & Gamble cut $2 billion in advertising expenses but will continue to increase mobile advertising investment... Even if you have nothing to do with these things, you can more or less feel that the screen in your hand is becoming more and more valuable. 500,000 iOS apps, 10,000 WeChat public accounts , 21,000 news website apps, hundreds of video apps... These constantly updated numbers are competing for people's attention today. In 2016, media consumption time increased worldwide - total media consumption time per person increased by 9 minutes (to 8 hours), and online media consumption increased by 14 minutes. Think about how much time you squeeze out to binge-watch TV series on the subway every day. On April 26, the Interactive Advertising Bureau (IAB) released a data report stating that digital advertising revenue in the United States was US$72.5 billion in 2016, of which mobile advertising revenue exceeded half of digital advertising for the first time. Another Internet market research organization, eMarketer, previously predicted that global mobile advertising revenue will reach US$101.3 billion in 2016, accounting for 16.5% of all advertising expenditures. "Brand money naturally follows consumers, and you'll find marketers are now mobile-first, or even mobile-only," said David Doty, executive vice president and chief marketing officer of the IAB, adding that mobile advertising has driven the recent growth in the advertising industry. In just 6 years, mobile advertising has become the undisputed "protagonist" of digital advertising. By comparison, it took its predecessor, online advertising, 23 years to surpass television advertising (whose revenue has stabilized at a 41%-44% share in recent years). Of course, this comparison is not so rigorous, but you can still feel from this time comparison that the huge changes brought about by mobile to the advertising market are faster and more drastic than PC. The earliest Internet advertisement appeared in the United States. On October 27, 1994, Hotwired.com displayed many advertisements from American telecommunications companies such as AT&T, IBM, Volvo , and Zima. These advertisements were published for a total of 12 weeks, each costing $30,000 and with a click-through rate of up to 30%. By 1998, the online advertising market reached $1 billion, and two years later, that number exploded to $8.2 billion. In China, the first online advertisement appeared in March 1997, when companies such as IBM and Intel published their $3,000 advertisements on ChinaByte. Another 20 years have passed, and the price of a splash screen ad on a mainstream news app on your phone has to be increased by another zero. The birth of super apps has made the money from mobile advertising flow more concentratedly into the hands of a few people. In the mobile advertising market, who can be called the big players? Google, Facebook, Alibaba , Baidu, Tencent. These five companies accounted for 74.6% of the mobile advertising market's revenue, with the top two, Google and Facebook, taking more than half of the share. According to the latest "Top Thirty Global Media Owners" report released by media agency Zenith, 64% of the growth in global advertising spending from 2012 to 2016 was caused by these two companies. It was easy for creatives, media buyers and advertisers attending the 2016 Cannes Lions Festival to feel that Facebook and Google owned the beach. The large area of technology company exhibition area occupying the beach was described by WPP Advertising Group CEO Martin Sorrell as "Duopoly Beach". This "duopoly" pattern will continue in 2017. According to Fred Wilson, founder of Union Square Ventures , "In 2017, Internet advertising will be primarily in the form of search, social , and mobile... Google and Facebook will win." Google controls seven global platforms with more than 1 billion users, and Facebook's 1.6 billion users exceed any other social platform. What scares marketers is not only the data advantages of these two companies, but also the ineffective advertisements they hastily produced in the new environment, which is the source of their anxiety. Both companies claim to understand consumers best today, with Google allowing brands to appear in front of customers with the right intent and Facebook helping brands find their core audience. "Advertising agencies are the most likely to be eliminated," a senior advertising executive told the Financial Times in an interview last year. "If buying (ads) is as easy as visiting Facebook and Google , and you can target specific groups of people, why do we still need media advertising agencies?" In order to cope with the digital advertising giants, more and more media have formed alliances, trying to attract advertisers with larger scale and relatively high-quality content. In March this year, Condé Nast announced an advertising sales partnership with Vox Media and NBC Universal to sell its advertising resources to advertisers in a package; the largest alliance in the television field is OpenAP, a media purchasing platform composed of Viacom, Turner and Fox Networks. The New York Times’ latest TV ad also uses the words “NYT is safer for brands”, directly satirizing the ambiguity of Google and Facebook’s data and the rampant fake news. What tricks are they playing on your phone to attract advertisers? You will see that mobile advertising already accounts for a fairly high proportion of the advertising revenue of the five companies mentioned above, reaching 70% and 92% for Tencent and Alibaba respectively. For Google and Facebook, which rely almost entirely on advertising to make money, the figures have reached 60% and 83% respectively. The standardization of mobile advertising is still being improved. With the competition between different apps, everyone wants to find the advertising format that will best satisfy both brands and consumers. Instagram, owned by Facebook, is the most representative of these. Since launching its advertising business in September 2015, Instagram has made earth-shaking changes to cater to businesses. Initially, only picture ads were allowed, then 15-second video ads were launched, and then gradually expanded to 60 seconds. This makes it easier for advertisers to put TV ads directly on Instagram. At the product level, advertisements in information flow are gradually adding "Shop Now" and "Learn More" functions to increase sales conversion after display. Changing the timeline and presenting information based on algorithms is another measure to address ad exposure. “On average, people miss about 70 percent of the content in their Instagram feed,” Kevin Systrom, Instagram co-founder and CEO, said in an interview. "What we need to do is to ensure that the 30% you see are the best 30%." WeChat Moments ads are also being improved. In March last year, they added the functions of following public accounts and downloading mobile apps. However, after these basic functions are improved, they still point to a problem - the platform that carries mobile advertising is naturally more friendly to the promotion of digital products, and marketers can intuitively observe the number of APP downloads brought by an advertisement. If it were Coca-Cola , how much of an impact would a 60-second ad have if played on a mobile phone? This is why "advertisers that contribute 90% of TV advertising revenue only account for 30%-40% of the advertising revenue of digital giants. The other 70% of the revenue of digital media giants comes mainly from small and local businesses, usually those that only provide digital products or services." However, Rob Norman, global chief digital officer of media agency GroupM, wrote in his latest "Interaction" report, "As TV media becomes more data-driven and targetable (more and more like digital media), and the quality of video content on digital platforms continues to improve (more and more like TV), the polarization of advertiser types between TV and digital platforms will change." Mobile video advertising is grabbing more and more market share . According to data released by the IAB, the proportion of search advertising in mobile advertising fell 2% to 48% in 2016 compared with the previous year, while mobile video advertising increased from 10% to 13%. Cisco says that by 2020, video loading will account for 75% of global mobile traffic . The ad space below the search box remains the most valuable real estate on the Internet, but on mobile screens, video ads are generating $4.2 billion in revenue at a 145% annual growth rate. Unfortunately, the investment of money may not be worth it. According to a survey by MOAT, among every 20 video ads placed in the information flow, only 3 ads were watched for 3 seconds or more, and only one ad was watched for 10 seconds or more. Last September, Facebook was exposed for exaggerating the length of time users watched ads on the platform, which once again sparked discussions about "trust" in the advertising industry. But in fact, this may have been the case for a long time. It’s just that in the past, TV advertising calculated the advertising effectiveness based on ratings, while digital advertising can know exactly whether the user has watched an advertisement in its entirety. So today’s advertisers may have to face the fact for the first time: no one wants to watch what you make. An extreme negative example is the 30-second video ad that sanitary napkin brand Kotex ran on Weibo in December 2016. The sound was automatically turned on and could not be skipped, creating the effect of a 30-second static magazine ad being shown on TV. Google has always believed that the "forced viewing" video ad model is unsustainable and that being forced to complete this task will destroy the user experience . So YouTube 's approach is that it charges only after the ad is clicked or watched completely or for 30 seconds. But despite its staggering scale, YouTube is still considered to lack enough inventory for what advertisers consider to be "quality." In March this year, major companies such as The Guardian, Starbucks , Coca-Cola, L'Oreal, HSBC, and Marks & Spencer withdrew their advertisements from YouTube because they were dissatisfied with their advertisements appearing next to extreme content, with estimated losses reaching US$300 million. This can be a huge hole in terms of "relevance". Facebook, which has been accused of inflating its numbers, is also working on better “relevance.” Facebook claims to make more than 25 trillion ad display decisions every day, determining what content and ads appear in each individual news feed. In 2016, Facebook developed a number of video products, among which the live video at the top of the app created a new opportunity for longer ads. But more often, people began to reflect on whether ads should be longer as possible (in the PC era, micro -movies several minutes long once became the most popular form of advertising). YouTube recently released a 6-second non-skippable video ad for mobile devices, which is 2 seconds longer than the current 4-second skippable YouTube video ad. How to cram necessary and effective information into such a short time has become a new challenge for marketers. “The future of in-feed advertising may be a whole new category of creative that understands both the constraints (time and attention) and strengths (scale and sharing) of in-feed advertising. Perhaps the future will focus on flat ads that resemble static animations rather than compressed versions of ‘traditional’ videos,” Rob Norman wrote in his article on the future of video advertising. Is there a renaissance in radio? In 2016, digital audio advertising generated more than $1 billion in revenue in the U.S. for the first time, including streaming services and podcasts. Some researchers believe that streaming, especially music, as the most widespread consumption behavior, has advantages that other websites or platforms do not have. They can help brands understand the “emotions” behind behaviors, thereby providing new insights into segmenting populations. According to data provided in GroupM's "Interaction" report, Spotify has 100 million users worldwide (as of June 2016) and 40 million paying users (as of August 2016), but Spotify's revenue from paying users is approximately US$2 billion, while its revenue from advertisers is only US$300 million. Each paying user is worth 15 times more than the average listener. In contrast, Pandora, which has far fewer paying users, is far ahead in advertising revenue. It reached $1 billion last year. Domestic music platforms currently rarely monetize through advertising. NetEase Cloud Music 's CEO Zhu Yiwen previously stated in an interview with Curiosity Daily that the proportion of advertising in revenue is "not large." But considering the size of the entire mobile advertising market, the share of music streaming and podcasts is still extremely small. Native advertising will be the mainstream in the future and a term closely related to information flow advertising is native advertising. This concept, proposed by the IAB in 2012, refers to content such as articles or videos that are specifically produced for advertisers and can still be searched outside of the advertising buyout period. Compared to traditional advertising, native advertising is more like the content itself. It has also become a tool used by mobile marketers today to combat ad blocking. Jon Steinberg, president of Buzzfeed, once described it this way: “When you use content in the form of a platform version, it’s a native ad. For example, on Twitter, it’s a tweet, on Facebook, it’s a new status, and on Buzzfeed, it’s a news item.” For digital giants, the platform's unique creative advertising formats are a reflection of their competitiveness. In October 2016, Google acquired the digital marketing company FameBit, which is mainly responsible for helping YouTube influencers find brand cooperation opportunities through original videos; Snapchat's most representative native advertising is its "featured filters", and last year they also acquired a San Francisco-based advertising technology company called Filter to further optimize the display effect of native advertising. Many old advertising concepts also appear on mobile devices in a more "native" form. If you have watched any domestic web drama recently, you will be impressed by the small theaters with complete stories inserted by the producers in the plot. These mid-insert advertisements featuring web drama actors are actually another form of TV drama implantation. In the mobile advertising world, advertisers are particularly concerned about conversion rates. Perhaps because digital advertising is naturally data-based, or perhaps because advertising platforms are promoting the so-called "precision" every day, advertisers care more about results, that is, conversion rates, than ever before. The report shows that performance-based advertising, which is charged based on sales conversions, has become increasingly popular over the past decade. The industry is developing in the direction of precision. In this process, various means of traffic cheating have become an open secret because every link is pursuing data. In 2014, The Wall Street Journal reported that more than 30% of web traffic was fake. In 2016, ANA (Association of National Advertisers) stated that trading platforms with poor reputations had fraudulent traffic of 25%-30%, while those with good reputations had less than 10%. AppFlyer pointed out that 34% of mobile traffic contained fake risks. The fake here does not entirely refer to machine cheating, but also includes the so-called "non-incentivized normal traffic". Although the clicks on these ads are real people, they are often caused by some kind of temptation (such as unreasonable page design, lottery red envelopes, free game props, etc.). The conversion effect of these ads is also not very good. On the one hand, verification by a third-party organization has become imperative. The latest news is that even Snapchat, which has the least standardized advertising, has announced that it will accept an audit as it prepares for its IPO. On the other hand, after the traffic dividend fades, creativity is still the most powerful means to avoid creating garbage and improve advertising effectiveness. 2017 will be the first year that mobile advertising exceeds digital advertising, and it will also be the tenth anniversary of the birth of the iPhone. A series of changes are about to begin. "How to advertise on mobile phones?" will be a question that every advertiser must think about. However, due to market changes, the way to compete for advertisers has changed. We will make a more specific analysis in the next article using the competition between local companies and 4A.Mobile application product promotion service: APP promotion service Qinggua Media advertising This article was compiled and published by @Curiosity Daily (Qinggua Media). Please indicate the author information and source when reprinting! Site Map |
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