Mobile Ad Spending Surges With Big Shift to Smartphone, Tablet Use

NEWS ANALYSIS: Mobile advertising is poised to surpass newspapers and radio advertising in 2014 as the amount of time people work with their smartphones and tablets keeps rising.

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The day that eMarketer predicted that mobile ad spending will surpass newspaper and radio ad revenues in 2014 seemed a particularly good time to catch up with the MassTLC's (Massachusetts Technology Leadership Council) Mobile Summit in Cambridge, Mass.

The eMarketer predictions were carried in the Wall Street Journal. The bottom line as carried in the WSJ contends that mobile ad outlays are projected to jump 83 percent this year to nearly $18 billion as newspapers turn in $17 billion and radio is projected to finish the year at $15.5 billion.

But wait—there is more bad news for the old media stalwarts. The rise of smartphones and tablets means mobile ad spending still seriously lags the amount of time users are spending on mobile devices. In the advertising world, the common wisdom is that ad spending strives to reach the attention level of the consumer on the preferred device.

While that is the common wisdom, the reality is advertising tends to be conservative and tied to old media relationships. In any case, it was with the knowledge that a lot more dollars could be headed toward mobile that the conference took place.

If we needed any further evidence that the mobile revolution is fully upon us, it was supplied by Michael Davies, senior lecturer at Massachusetts Institute of Technology's Engineering Systems Division. Davies, who also is chairman of consultancy Endeavour Partners, began the afternoon's keynote on the future of mobility with this assertion: "We believe very strongly that we are at an inflection point." That inflection point takes smartphones, pervasive connectivity and cloud computing as the jumping off point for the unfolding mobile era.

How does that era look? For one thing, there is a division between the generation (mine for sure) that grew up without the smartphone and the generation now growing up where the smartphone is not just an accessory but a central part of their personality.

"Consumers are becoming wizards," said Davies. He explained the wizardry involved in smartphone-based shopping where product and price comparisons, user ratings, and the ability to praise or complain about a purchase are all consumer tools that are always on and always available to the consumer.

This "good, easy and fast" consumer purchasing versus buying experiences that are "bad, hard and slow" will accelerate the success or failure cycles for retail and other businesses."You [the retail business] can be Yelped out of existence," said Davies.

Davies' comments were backed up in a second panel on mobile trends. Nitzan Shaer, managing partner of the High Start Group, focused on personalization in the mobile application experience. The current trend toward making applications that make greater and greater use of the smartphone's existing sensors including location to create ever more personalized apps is only going to increase, according the panelists.

These personalized apps, dubbed "appticipation" by the panelists, will only become more precise as the numbers of sensors increase and the skills of mobile app developers continue to improve.

The question of when does personalization intrude on privacy was as much on the audience's mind as it was a concern for the panelists. MIT's Davies said privacy concerns were more prevalent among the digital immigrants (those who grew up without smartphones) than with the digital native generation. "We care a lot about anonymity and privacy; we just track the device and where the device goes," said Mike Scheider, vice president of marketing for Skyhook Wireless.

The news that the advertising dollars are shifting ever faster to mobile devices while smartphones are wielding ever more personalized, location-aware applications is an indication that even the rapid shift in media ad dollars is only one indication of the rise of the mobile economy.

The next time you use your smartphone to make a purchase from, find a new favorite restaurant or call an Uber instead of a taxi, you are participating in the economic inflection point talked about at the mobile summit.

Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008, authored this article for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this article. All duties are disclaimed. Lundquist works separately for a private investment firm, which may at any time invest in companies whose products are discussed in this article and no disclosure of securities transactions will be made.