In Advertising, Blog Articles

Mary Meeker is a bona-fide tech legend. An author, analyst and general partner at Silicon Valley venture capital firm Kleiner Perkins, Ms. Meeker issues an annual Internet Trends report and presentation that TechCrunch calls “essentially the state of the union for the technology industry.” The report compiles and crunches the most recent data from leading sources and draws larger conclusions that are indispensable for understanding how the world of technology is unfolding.

Internet Trends 2017 is a 355-slide behemoth. It’s nearly impossible to wrap your head around the whole thing in one shot. That’s why, in this blog post, we’ll take a look at some of the most striking takeaways regarding the world of mobile advertising.

There’s still a huge opportunity gap in mobile advertising.

An opportunity gap is a marketing scenario with substantially lucrative potential that is somehow going overlooked or unaddressed. Here’s how Meeker’s presentation sets things up:

  • In 2016, American adult mobile usage hit three hours per day—for the first time.
    Meeker cites an eConsultancy stat we’ve shared with you before. Just five years ago, this was under an hour per day.
  • Mobile ad revenue in the U.S. is growing faster than internet ad revenue.
    Meeker’s data comes from an Internet Advertising Bureau survey conducted by PricewaterhouseCoopers, which notes that mobile now—and for the first time—makes up more than 50% of all internet ad revenue.
  • But when you compare how much of their media consumption time users give to mobile to how much ad spend brands allocate to mobile….you uncover a $16 billion opportunity gap.

Let’s unpack this for a minute. One of the great things about the Meeker report is how her team synthesizes data from disparate sources to expose underlying trends. This is a great example. The Meeker report shows that mobile represents 28% of media consumption time, yet only 21% of advertising spending in the U.S.. Both percentages have been increasing over time and advertisers have made up ground since the 2016 report— but they still have not caught up to how the public spends its time. This amounts to a roughly $16 billion opportunity gap. Brands are missing the chance to connect with consumers where they spend a great deal of their time—and publishers and app developers are missing out on a huge chunk of ad revenue.

User experience matters in mobile advertising. It matters a LOT.

Mobile ad blocking is skyrocketing
Citing data from PageFair, Meeker reports that number of people using ad-blocking software on mobile zoomed up more than 200 million users in just two years. In the US, this practice has only penetrated 1% so far, but it’s worth noting that users in India and Indonesia, which are both heavily mobile countries, ad blocking usage is at 28% and 58%, respectively. Generally, where these countries go in terms of mobile, the rest of the world follows.

As we’ve said before, at Phunware, we recognize that ad-blocking software has been around for ages on the desktop. It’s nothing new. As it continues to penetrate mobile, ad blocking will force publishers to be more selective about the ads they run and how those ads affect the user experience. It will also continue to spur the use of native advertising, which can offer a better user experience as well as higher performance for advertisers.

Remember: better user experience + better personalization and segmentation = ads that perform better (and don’t annoy people).

Users don’t want to give advertisers something for nothing.
Drawing from Millward Brown’s AdReaction Video study, one of Meeker’s slides highlighted the fact that more than 65% of respondents had positive attitudes towards online video ads that are incentivized with mobile app rewards. This makes sense because the incentive gives users something they find valuable in exchange for viewing the ad. The same report showed that 74% of users felt negative about social and in-banner autoplay video ads, and 80% felt negative about pre-roll video and mobile app video pop-up ads. This finding drives home the point that mobile ads need to provide some kind of value to the user and, overall, be less disruptive to the user experience.

The rise of “more than just an ad” ads.

Drawing upon the unique capabilities of mobile, brands and publishers are offering media formats that go beyond what we think of as an ad. In her report, Meeker highlighted the Gatorade-Snapchat partnership on “Serena Williams Match Point,” in which Snapchatters could swipe up on a Snap Ad to play a webview game, competing as an 8-bit Serena Williams in each of her Grand Slam victories. The engagement levels were impressive—users spent an average of three or more minutes playing the game.

Here at Phunware, we offer playable ad formats that deliver 2-3x higher engagement than traditional ads. These formats are available across a wide spectrum of apps within our advertising platform. We’ve also taken native and “authentically mobile” a big leap forward through our unique Phusion™ campaigns, which integrate uniquely branded mobile experiences and media within a native app environment. (To learn more, check out our award-winning Phusion campaign for Paramount Pictures International’s Mission: Impossible – Rogue Nation)

For another example, Uber is adding third-party content to its rider app, such as a partnership with Foursquare to bring its user recommendations into the ride experience. Meeker’s slide suggests that it’s only a short hop from there to incorporating local offers that are contextually relevant to the rider’s location, route and time of day.

Phunware takes this one step further. Our Rewarded Visit solution entices gaming users to earn additional in-game rewards by visiting a real-world location after watching a specific video ad. For brands, Rewarded Visit is a great way to serve up in-store promotions and directly track attribution. So, for example, an adventure sports retailer might partner with a relevant racing game. After watching an in-game video ad, users might receive in-game currency (such as coins or an extra life), along with a coupon from the retailer that can be redeemed by visiting one of the retailer’s physical stores.

Keep your eye on the ball.

Technology moves faster and faster every year. That’s why it’s great to have big brains like Mary Meeker’s parsing the landscape and helping us stay on top of everything—especially in the world of mobile marketing, which is only beginning to show its full potential. While the big picture is important, it’s vital for brands, publishers and developers alike to stay focused on their own business goals and initiatives. Try not to get overwhelmed—look for the sweet spot where internet and mobile trends align with your objectives. And look for smart partners who can help you drive toward them.

Want to talk more about the Meeker report and what’s going on in the digital and mobile world? Drop us a line at info@phunware.com.

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