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More Eyes on Mobile with Ad Spend Expected to Surpass Desktop

June 14, 2012
By Greg Franzese

Where is online video heading?

That's one of the questions Mary Meeker, a Kleiner Perkins partner and prominent former Internet analyst, tackled at AllThingsD’s D10 Conference. Among the Internet trends she explored, the entertainment industry has been profoundly impacted by the proliferation of mobile devices and video on demand.
 
In the U.S., 3G mobile penetration reached 64 percent in the fourth quarter, a 31 percent increase over the year before. Globally, Meeker said mobile adoption is still in the early stages, with an 18-percent penetration rate. On the tablet and e-reader front, U.S. adoption has skyrocketed from 2 percent in April 2009 to 29 percent in January 2012. Of particular note, the chart below showcases the rapid embrace of the iPad relative to the iPod and iPhone. Within the first eight quarters after launch, Apple shipped more than 60,000 iPads, devices that have proven to be popular for online video consumption. (Check out VideoMind's Video Index report for more stats and trends on the iPad effect.)
 
 
All this means there is a prime opportunity to advertise to and target engaged mobile users. Most of this is done via mobile apps, but advertising revenue is significantly picking up as well, as we can see from 2008 to 2011. 
 
Mobile ad spend hit $1.6 billion in 2011 in the U.S. alone. The main drawback advertisers face is that CPM is five times lower on mobile than desktop. But instead of getting dissuaded by these engagement numbers, Meeker insists that "it just takes time" and that mobile monetization in the U.S. could surpass desktop ad revenue in the next one to three years. Our Video Index found viewers are spending more time with video on their mobile devices; overall time watching on smartphones grew 41 percent last quarter and time viewing on tablets increased 32 percent. The Video Index's analysis of time-of-day viewing found people use their tablets more in the mornings and especially in the evenings. During this time, they might be more receptive to certain types of paid messages.
 
These changes point to technology's role in shaping TV and the new opportunities that exist to engage viewers on all screens. Keep your eyes peeled on online video.
Posted in Mobile
Tags mobile video, mobile advertising, monetization
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