Recently, Scott Maddux, who leads our AWE division, moderated a panel at The NAB Show (National Association of Broadcasters) in Las Vegas titled “Is Broadcast Advertising a Billion Dollar Market on Mobile?” He was joined by Sean Gilligan from Flurry, James Rothwell from FreeWheel and David Siemer from Siemer and Associates, LLC.
Using research on media consumption across all devices, the panel focused on the rapid growth, phenomenal potential and strengths and weaknesses of mobile TV advertising. Scott opened with a high level view of the mobile advertising opportunity from the viewpoint of a television media company. Pulling a page from Mary Meeker’s 2012 Internet Trends Report, we see the percentage of time spent as consumers (US Market) vs. total ad spend per media format. In 2012, print and radio were in a tough spot with regards to spending but television was holding steady with 42% of time spent across all media and about 43% of total ad dollars allocated. That is about $75 billion in the US. As of 2012, users were spending 12% of their time on mobile devices and only 3% of total US ad spend was on mobile (this has clearly skyrocketed since then). Mary Meeker calls out here a 20 billion dollar delta (a $14 billion dollar delta on mobile alone).
The 2013 numbers will increase dramatically. The potential ad spend is on the increase and for anyone in the mobile media space, this is extremely good news. We are in the early stages of the market and it is all going up from here as the market matures.
We can only assume that some of the $75 billion dollars will be spent on mobile… so what does television need in the mobile environment? As Scott showed in this chart, television networks, distributors and OTT companies are very active in the mobile space.
We see that there are single show apps for the super fan to get that deep deep experience. Then we hop to the network level, an area where Bottle Rocket and AWE have deep experience. We are also seeing live linear, meaning what is available on your television right now, is also available on your mobile device in the app. All of this is in the interest and support of advertising. The ad sales departments within the networks are actively engaged with selling mobile products and mobile inventory. Other MVPD’s including Netflix, Hulu are in a category of their own. When we think of advertising, most of the success so far has been on the video ad side, so when you are watching ‘The Black List’ on NBC, the network is monetizing these apps and content very effectively. They are seeing $25 to $45 CPM’s. Hulu plus pushes closer to $100 CPM’s as they are very targeted ads.
It is a great time to be a content owner! There are ZERO barriers for distribution right now. You can get your content out across many many channels. It is not like the old days when you had to have a cable distribution deal to get your programming across.
So you can find Conan on the Conan app, you can also find Conan on the TBS app, and you could also find Conan in your Xfinity or Time Warner Cable app.
From a network’s perspective, the story doesn’t end at mobile. There is a huge battle going on around the living room right now and we have Sony, Microsoft, Apple, Google and Amazon all making huge plays for the television viewer as Over-The-Top solutions completely outside of cable. This includes Chromecast, Apple TV, Kindle Fire TV the upcoming Android TV and Xbox One. The numbers are not quite competing but they will very soon.
It is apparent just in the products that we have in market now that ad sales teams are very hungry to sell inventory on mobile. It is important to look beyond video ads and look at the potential to deliver rich media experiences or transaction based experiences. It is also clear that marketers are very hungry to communicate their brand on mobile. While we have the distribution as well as the consumption, we haven’t yet identified the standard formats, packaging, pricing or the value proposition. Buyers and sellers want it, but no one knows exactly what it is. The Nielsen ratings do not yet reflect mobile consumption. As soon as they turn the switch later this year, it will help ease the path for a lot of this market to mature.
Mobile continues to expand its large ecosystem of display ads, video ads, rich media and companion ads giving advertisers innovative ways to reach and engage consumers. We are really looking forward to seeing Mary Meeker’s 2013 trends. This is an exciting time to be in advertising!comment