Peter Kafka

Recent Posts by Peter Kafka

Mobile Ads Are Growing Fast, Still Pretty Small

A new report from a digital ad trade group tells us that advertisers spent a lot on digital last year, which we already knew. But it’s always useful to see what kind of digital ads they’re buying.

Here’s that snapshot, from the Interactive Advertising Bureau’s 2011 report.

Two important takeaways:

  • Search ads (read: Google) are not only as dominant as ever, but even more so. They accounted for 47 percent of digital ad spend in the U.S. last year, up from 45 percent the year before.
  • Mobile ads, which are getting a lot of attention right now courtesy of Facebook, Apple, Google and everyone else, are still fairly small. Last year they accounted for just 5 perent of total spend, or $1.6 billion — less than a couple Instagrams. But they’re growing very fast, up 149 percent over 2010. Which explains some of the ravenous appetite for Millennial Media shares when that mobile ad company went public last month (still, like most other tech IPOs, MM has given up ground since its initial pop.

Bonus chart! Here’s some red meat for people who like to talk about The End Of TV, which they are sure will be brought about by the Web. Lookit here! Last year, Web ads triumphed over cable!

Except this one comes with important contextual caveats:

  • Cable TV has two revenue streams — one of them comes from advertisers, and the other comes from you, the cable TV subscriber, whose monthly bill gets redistributed to cable programmers in the form of affiliate fees. And those affiliate fees are still climbing.
  • You won’t really be able to argue that the Web is beating TV until TV advertisers start moving their budgets, or big chunks of their budgets, to the Web. And that hasn’t happened yet, which is the reason the Web guys are now trying to ape the TV guys.

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