In the last ten years, the way our society interacts with media has drastically changed. With the normalization of carrying a tiny flatscreen TV in our pockets, we can watch our favorite shows virtually anywhere. Cell phone service providers now sell more unlimited data plans than ever, and as a result, we are being constantly tempted by mobile entertainment. That means we don’t interact with advertisements in the same way as we used to, in the form of television commercial breaks or radio spots. Here lies the concern for marketers. In a rapidly changing world, how can you make sure your message is still reaching as many people as possible?
What’s been going on?
The current media trends are hugely impacted by the use of smartphones and other mobile devices. 2019 marks the very first year that United States consumers spent more time using mobile devices than watching television. As recently as 2014, the average US adult watched nearly 2 hours more TV than they spent on their phones “We’ve expected that mobile would overtake TV for a while, but seeing it happen is still surprising,” said Yoram Wurmser, eMarketer principal analyst. Nearly three-quarters of all internet time is spent on mobile, as time spent on mobile increased 31%, while the use of internet on desktop computers decreased 2% so far in 2019.
Allowing yourself to get sucked into watching one viral video after another has long been a preferred method of procrastination, and this hasn’t changed with the rise of the smartphone. Of time spent watching video content, American adults spend about 40% viewing on mobile devices, which adds up to about 40 minutes a day. Video is the third-biggest driver of growth in mobile app engagement, behind digital audio which comes to 53 minutes daily and social networking with 43 minutes. One thing is clear, video streaming is a very important thing for marketers and trend watchers alike to keep their eye on.
Another massive worry for marketers is the ‘Netflix Effect’. Instead of paying for traditional cable plans, more and more Americans are canceling their contracts switching to streaming services such as Hulu and Netflix. Consumers are no longer tied to the TV and forced to sit through the commercial breaks of their favorite shows. In 2018, the number of people who made the switch increased by nearly 33%, to 33 million people. Consumers prefer the flexibility of being able to watch what they want when they want to, with less ad interruption. These platforms are also luring viewers with exclusive shows and movies that you can’t get anywhere else. From just about any perspective, these streaming services are the way to go.
So what does that mean for advertisers?
Society’s steady switch to viewing media differently has called for some changes in the world of advertising. For a start, many brands have switched their advertising efforts to online placement. Digital ad revenues made a 22% increase in 2018, hitting $107.5 billion according to the IAB’s Internet Advertising Revenue Report. This was the first time revenues surpassed $100 billion as consumers spent 20% more time online.
Advertising on Facebook has risen drastically in the last five years, with an enormous 122% increase between 2014 and 2015. During 2019, Mobile ad spend will top $93 billion, over $20 billion more than what will be spent on more traditional TV advertisements. Also notable, digital audio ad revenue on sites like Spotify grew by 23%.
Many large platforms are doubling down on high-quality video content geared for mobile audiences. Video advertising is becoming less and less skippable and more interactive. It has been shown that the majority of people prefer to be informed about new products and services the most via video content, over ways we might have been used to seeing. Digital video revenue rose from $11.9 billion in 2017 to a huge $16.3 billion in 2018 for a 37% increase. Nearly two-thirds of video revenue came from mobile, up from 52%.
This trend of surging growth in mobile video streaming is not predicted to stop any time soon. Long term, smartphones will remain the dominant device for consumer media.
Podcasts are yet another area of opportunity within the world of advertising. The global podcast industry is forecast to make up 4.5% of all audio advertising spend by 2022, hitting $1.6 billion, according to WARC research. This trend is not expected to stop any time soon, due to the expansion of high-speed 5G mobile networks nationwide over the next few years.
The simple fact is, for mobile marketers, the growth of ad-free streaming services limits mobile marketers the ability to reach viewers in traditional ways. However, many broadcasters, cable networks and the like have jumped on the bandwagon and created video apps that include ads during programming. One such company is Hulu. Roughly 70% of its 82 million viewers subscribe to its lowest tiered plan, which is ad supported and charges $5.99 a month, half the price of the ad-free version. Hulu generated almost $1.5 billion in ad revenue last year. This gives us a great idea of how many consumers are willing to view some ads if it means lower subscription fees. Social networks such as Facebook, Twitter and Snapchat also have leveled up their ad-supported video programming while simultaneously boosting mobile engagement.
So, what can I do to stay ahead?
So for many marketers, mobile video is where it’s at. Videos can be highly engaging and can allow you to reach a larger number of people as well as develop a strong emotional connection with them. From here, it’s up to you to turn those viewers to customers.
If I haven’t gotten you on board just yet, take a look at these stats:
- 70% of consumers say that they have shared a brand’s video
- 72% of businesses say video has improved their conversion rate
- 52% of consumers say that watching product videos makes them more confident in online purchase decisions
- Video is shared 1,200% more than both links and text combined.
Having video on your company’s site can even improve search engine optimization, or SEO. This means that when someone searches for a keyword relating to your site, you’re more likely to appear towards the top of the list of results. This is proven to lead to higher conversion rates. According to Google, If your site includes video, it’s 53X more likely to get a first page spot in search results.
Thinking more futuristically, opportunity also lies in innovative platforms like virtual and augmented reality and artificial intelligence. Analysts at Harvard Business Review predicted that by 2020, Artificial Intelligence technologies would be pervasive in almost every new software product and service created. Many tech experts insist that AI is the biggest commercial opportunity for companies, industries, and nations over the next few decades. It has even been predicted that AI will increase global GDP by up to 14% between now and 2030.
AI can also be your company’s best friend. Artificial intelligence can analyze consumer behavior and search patterns, and use data from social media platforms and blog posts to help businesses understand how customers interact with their products and services. More and more businesses are incorporating AI into their websites in the form of chat bots. These helpful instant messaging platforms integrated into a website can help prospective clients get quick answers to their questions, without taking up the time of your staff.
In order to stay on top of the technology game, it’s crucial to remain familiar with and understand what’s happening in the digital world. When new opportunities like ad platforms or social media tools arise, it’s important that you are aware of their abilities. One way to stay up to date and ahead of your competitors is to subscribe to RSS feeds and Facebook pages of information websites. These sources will keep up with new technology and announce the latest and greatest trends available to assist you in your marketing goals. Or, if running your business takes up too much of your time to be researching the latest in tech (we get that) give DDL Advertising a ring! We specialize in search engine optimization, media buying of all sorts, price per click, and much more to keep the new customers rolling in.