Mobile Ad Spending Doubles in 2012′s First Half

From my Forbes.com blog The New Persuaders:

Mobile ads drove a 14% rise in online advertising revenues, to $17 billion, in the first half of 2012, according to a report out this morning from the Interactive Advertising Bureau and PricewaterhouseCoopers.

According to the IAB’s latest half-year report (full pdf here), mobile ad revenue jumped 95%, to $1.2 billion, or or 7% of total online ad revenues. That’s up from 4% a year ago. The reason is fairly obvious, and something every company from Facebook to Google is struggling with: People are increasingly accessing online service through smartphones and tablets, thanks to the popularity of the iPhone, the iPad, and Android devices, and advertisers are following them there.

The 14% rise pales next to a 23% rise a year ago, though the IAB attributes last year’s jump to a recovery from the recession. Online ad spending continues to far outpace overall advertising spending, which rose less than 1%, according to both Nielsen and Kantar Media. Television remains the one relatively bright spot in traditional media, though its growth also remains far behind digital. Cable saw a 4% increase, to $10.9 billion, and broadcast rose 3.3%, to $11.1 billion.

Performance-based ads, those seeking to elicit an immediate purchase or other action, remain dominant, and even gained ground over more brand-oriented ads. Chief among these ads are search ads, which despite their 48% share of overall online ad revenues continued to gain as a category in the first half, rising 19% to reach $8.1 billion. That means search giant Google, which reports its third-quarter earnings a week from today, still reigns supreme in online ads.

Display ads rose only 4%, to $5.6 billion, reducing its share of overall online ads from 36% to 33%. Although the IAB didn’t mention it, no doubt part of the relatively slow growth is due to the rise of more efficient (that is, lower-priced) banner ads placed via real-time bidding through ad exchanges.

“Brand dollars are moving online, but at a slightly slower pace than the last two half-year reports,” Sherrill Mane, the IAB’s senior VP research analytics and measurement, said in a conference call this morning. That’s a problem, indeed perhaps evidence of a problem, for companies such as Facebook that are depending on brand marketers moving television and magazine ads online. …

Read the complete post at The New Persuaders.

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Online Ad Revenue Growth Slowing

Cross-posted from my Forbes.com blog The New Persuaders:

Internet advertising revenues grew 15% in the second quarter from a year ago, according to the latest official tally released today. The Interactive Advertising Bureau said online ad revenues from all sources hit a record $8.4 billion.

But that 15% growth rate, while not bad in these uncertain economic times, is a considerable drop from a year ago, when revenues rose 23%.

IAB didn’t provide a reason for the slowing growth, but ad folks across the spectrum of advertisers, agencies, and publishers have noted caution on the part of marketers as the economy has appeared to stall in recent months. While Google’s search ads, which led to the company’s 24% rise in revenues in the first quarter, continue to be strong, less direct or measurable ads such as display ads may be seeing more of an impact from the economy. Facebook, for instance, one of the big drivers of display growth, saw revenues fall 8% from the fourth to the first quarter, though to be fair, first-quarter revenues jumped 45% from a year ago.

In any case, the flagging growth all the more points up the need for Web publishers to come up with better ways to attract the brand advertisers that still spend 95% of their budgets in traditional media. They don’t yet see a compelling way to reach a whole lot of people with image ads online.

Read the original post at The New Persuaders.

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