The latest IAB/PwC ad spend figures for the United Kingdom, released last week, reveal an industry in rude health.
In the first half of the year (H1), mobile racked up US$1.14 billion in advertising revenues, up 68% from the corresponding figure for H1 2013. If last year’s pattern is repeated, where the total 2013 ad spend was 2.3 times the H1 figure of US$689.3 million, then we are heading for a total UK mobile ad spend figure for 2014 of US$2.65 billion.
That would be a 60% increase on the total figure for 2013 of US$1.65 billion, three times 2012’s figure of US$845 million, and 43 times the 2009 total of US$60.4 million.
Mobile now accounts for 20% of UK digital ad spend, compared to 14% a year ago. And of the US$636 million spent on advertising on social media channels, 53% (US$336.8 million) is accounted for by mobile, reflecting (though slightly less than) the proportion of ad revenues that Facebook and Twitter see coming from mobile channels.
For the first time with the release of these figures, native advertising on mobile (and desktop) devices is broken out. Native (actually “native and content”) advertising accounted for $US346.9 million of advertising spend in H1 2014, including “paid-for sponsorships, advertisement features, and in-feed distribution.”
Already, this represents 21% of digital display advertising. And if that figure does not hit at least 30% for the full year when those results are out, I will be surprised.
While those in the mobile ad space will doubtless be delighted with these figures, they are also increasingly focused on the next challenge, and it’s one that applies to publishers as much as to any other vertical: that of cross-screen attribution.
Namely, how do I work out that a reader or a customer on one device is the same reader or customer on another, so that if they make their final purchase on a desktop PC after a Google search, I can recognise the part that days or weeks of research on mobile and tablet might have played in delivering the sale?
It’s an area that is a attracting a lot of investment and two types of approaches.
On the one hand, you have companies like Drawbridge (though there are many others) that use statistical methods relying on anonymous data to track people as they move between their smartphones, tablets, and PCs, identifying the same user across their various connected devices, with an 85% degree of confidence, by viewing user activity through ad requests.
Drawbridge’s Connected Consumer Graph currently includes 1.1 billion consumers across 2.6 billion devices.
On the other hand, you have the log-in approach, where two companies, Google and Facebook, are deemed to have something of an advantage. As the user is logged in on the device they are currently using, then it’s relatively easy to identify them as they move across devices.
Last week I had a meeting with an ad tech firm that confirmed to me that it sees the log-in approach as the most reliable solution. It is inviting its advertiser clients to pool their databases so they can tap into the aggregated data and identify users via an encrypted email address. It expects to have the solution available before the end of the year.
It sounds to me like a case of going back to the future, employing the age-old method of pooled data to solve a very modern marketing challenge.
Who wins and who loses in the battle for cross-screen attribution is still hard to call. But for those who do get it right, the promise is one of almost unprecedented insight into their customers’ behaviour and what makes them buy.
No wonder so many companies think this is a prize worth fighting for.