The Advertising Market 2012
By Heidi B. Malhotra
Epoch Times StaffCreated: November 17, 2012Last Updated: November 17, 2012.
When surfing the Internet, one is inundated with advertisements on almost every website. Each advertisement comes with a cost to the advertiser and an income to the advertisement’s host.
To provide an idea of mobile advertising’s ability to reach a large group of people, Snaphop published mobile phone statistics it had collected from other websites.
In 2011, the mobile market consisted of 835 million people who owned a smartphone and 5.6 billion individuals who owned a feature phone. Generally, a feature phone cannot download information from a website and thus is not suitable for earning an income, while each click on a smartphone advertisement earns someone an income.
Mobile marketing produces more immediate responses, and a higher response rate, than any other marketing method ever seen before.
In 2012, smartphone subscriptions increased by 55 percent, with choices from over 400 smartphones in the U.S. market, providing a bonanza of potential customers to advertisers.
“Mobile marketing gives marketers access to a captive audience in a hyper-targeted way. It produces more immediate responses, and a higher response rate, than any other marketing method ever seen before. The mobile marketing tsunami is changing the dynamic of every element of marketing.” the ViralBlog states on its website.
Advertisement Income Potential
There are many articles on the Internet that explain how one can earn a decent income through taking part in the Internet advertisement game.
According to a post on the Zemalf blog, there are three ways one can earn an income by using the Internet: using advertisement as an income producer, the sale and promotion of someone else’s products, and marketing one’s own products and services.
“Each of these ways have the potential to make you full-time income or add another income stream for your Internet business,” the Zemalf post suggests.
Advertisement spending is split into measured and unmeasured media. Measured media was in vogue before Internet advertising became popular. Comprised mainly of television and print advertisements, measured media was tracked by advertisement tracking services. Unmeasured media is a term used when it comes to online advertising.
The mobile marketing tsunami is changing the dynamic of every element of marketing.
“So where’s the money going? Into unmeasured disciplines. … The appeal is clear: Marketers are putting money into disciplines that directly connect them with targeted consumers,” according to a June article on the Advertising Age website.
Advertising Spending Statistics
The top 100 advertisers (Leading National Advertisers, LNA) increased advertisement spending by 4.8 percent in 2011, with measured spending decreasing by 0.2 percent and unmeasured spending growing by 11.8 percent, according to the Advertising Age article.
“That slower growth shows how major marketers have kept a check on ad spending in this plodding economic recovery. Measured media’s share of LNA spending dropped to 55.8% in 2011 from 58.6% in 2010,” the Advertising Age article suggests.
The 100 top advertisers in different sectors decreased spending in the measured advertisement area in 2011, with the exception of the restaurant and financial services sectors.
According to the Advertising Age article, retailer Kohl’s Corp. reduced its measured media spending by 2.5 percent or $331.3 million in 2011, while it increased its gross advertising costs by 10.4 percent or $1.123 billion. The telecommunications sector reduced advertising spending by 7.9 percent, with firms such as AT&T Inc., Sprint Nextel Corp., and Verizon Communications Inc. reducing measured media spending.
Global advertising spending could rise “from 3.8% in 2012 to 4.6% in 2013 and 5.2% in 2014,” the ZenithOptimedia Group states in an Oct. 1 release.
According to ZenithOptimedia, the United States is still the top nation when it comes to advertising spending, with an expected 29 percent or $69 billion of the global advertising spending budget between 2011 and 2014. Eurozone advertisement spending is expected to decline by 3.1 percent this year, mainly due to the Italian, Spanish, Portuguese, and Greek economic problems.
However, “the US continues to deliver solid growth. This, combined with the growth in developing markets and in digital media, has helped mitigate the drop in eurozone spending,” said Steve King, global CEO at ZenithOptimedia Group, in the release.
Mobile Advertising Gaining in Importance
Mobile advertising—the interaction between a product or service provider and the owner of a mobile device or smartphone—has become an important factor for marketers, which is possible because of the advancements in telecommunication technology.
According to an Oct. 11 announcement on the Interactive Advertising Bureau (IAB) website, Internet advertising revenues reached $17 billion during the first two quarters of 2012, a 14 percent year-over-year increase, when compared to $14.9 billion during the first two quarters of 2011.
Mobile advertisement increased from $636 million for the first six months in 2011 to $1.2 billion during the same period in 2012, reflecting a 95 percent increase between July 2011 and July 2012.
“This report establishes that marketers increasingly embrace mobile and digital video, as well as the entire panoply of interactive platforms, to reach consumers in innovative and creative ways,” IAB President and CEO Randall Rothenberg said in the announcement.
In 1996, the first six-month revenue of mobile advertising was $82 million. During the same period in 2000, revenue amounted to $4 billion, but decreased during the first two quarters of 2002 to $3 billion. In 2008, mobile advertising revenue increased to $11.5 billion during the first half of the year, decreased to $10.9 billion during 2009, and then in 2010, 2011, and 2012 increased by 11 percent, 23 percent, and 14 percent respectively.
“Solid double-digit growth in a stagnating economy is a significant accomplishment. There is evidence that CPMs [cost per impression] are maintaining, and even increasing, further substantiating the vitality of the internet ad market,” said Sherrill Mane, senior vice president at IAB, in the announcement.
America’s Top 10 Advertising Firms
“The 10 largest advertisers in the United States spent $26.2 billion in 2011, according to Advertising Age, an advertising trade publication. … The top ten accounted for more than a quarter of the $102.6 billion spent by the top 100 advertisers,” according to a mid-2012 article on the 24/7 Wall St. website.
When it comes to advertising spending, not all industries are counted among the top 10, or even the top 100.
For example oil and energy companies, such as Exxon Mobil Corp., are not even counted among the top 100 firms. Other industries not that involved in advertising include construction and mining, as well as the aerospace and defense industries, with firms such as Caterpillar Inc. and Lockheed Martin Corp. respectively.
America’s biggest advertisement spender in 2011 was Procter & Gamble Co. with a total advertisement outlay of $5 billion, according to the 24/7 Wall St. article.
There actually appeared a grouping of spenders, starting with the $2.1 billion group, which included the Walt Disney Co., the L’Oreal Group, American Express Co., and Ford Motor Co. AT&T Inc. and JPMorgan Chase & Co. spent $2.4 billion. Comcast Corp. and Verizon Communications Inc. spent $2.5 billion, followed by General Motors Co., which spent $3.1 billion.
“General Motors has recently decided to stop Facebook advertising after four years of using the social networking site. Still, the Detroit automaker is the leading online advertiser in the nation at $242 million. While GM is spending just slightly more than the number two online advertiser, Verizon, it is spending almost 270% more than Ford in this medium,” the 24/7 Wall St. article recounts.
Sentiment: Strong Buy
Stock price sucks for those who bought it higher but what a once in a lifetime opportunity for those who are buying it now. That article says it all. Mobile is the future for all of these brands and marketers. Just look at the clients this company has and ask if you think they will be spending more or less going forward with them. Such a no brainer in my opinion.
Thanks xtj, maybe we will get a large slice of the "Mobile Ads Business". I wonder how long it will take before we start generating $$ in a significant way, like many on this board have predicted. Hang on
After attending a session at ad:Tech New York last week entitled “Mobile Marketing: Best Practices for Cracking Today’s Most Intimate Channel,” I too was encouraged to hear that major brands are investing big in mobile. Presenters included as former Anheuser Busch exec Maarten Albarda, Qualcomm’s Peter Mark, Nielsen’s Eric Ferguson and ESPN’s Mary Sheehan.
Albarda, who served a dual role as presenter and moderator first affirmed mobile advertising’s promise that smart phones are used evenly amongst both men and women and mobile shopping is growing and is estimated to reach $580M this year alone. Smart phone and mobile device usage is booming around the globe and in some countries smart phones even outnumber the population (hello Brazil!).
Sentiment: Strong Buy