Digital holds a 29.3% share of all media investment in the United States, up from 28% last quarter, according to GroupM’s annual Interaction 2016 report, which aggregates insights from the agency’s digital advertising activities and was released on Monday.
GroupM focused its findings around four core issues related to the growth of mobile: the difficulty of advertising in an app environment, viewability concerns in the native feed on mobile, measurement difficulties for mobile videos and ad blocking in mobile apps.
GroupM didn’t break out exact mobile figures, but competing agencies MAGNAglobal and ZenithOptimedia noted mobile’s tremendous surge. ZenithOptimedia’s global ad spend forecast predicted mobile will grow 128% and account for 92% of new advertising dollars by 2018.
This growth comes from the rise of platforms like Instagram and Snapchat that have bridged consumers’ transition to a mobile-first world, said GroupM Chief Digital Officer Rob Norman.
“It’s really the rise of the app ecosystem that catalyzed mobile advertising,” he said. “Our thesis was that … the world has gone from set-top to desktop to mobile. [Now we’re saying] maybe that’s not true — maybe we went from channels to sites to apps.”
GroupM found that most mobile users have 30 to 50 apps installed on their phones. Less than 10 of these apps represent 90% of aggregate usage. The heavily used apps tend to be Facebook, Google and messaging apps like Messenger, which is owned by Facebook.
But for advertisers, the mobile migration raises concern for measurement and reporting. Walled gardens make it difficult to report consumer viewership data, despite partnerships with video viewability measurement players like Moat.
According to GroupM’s findings, 20% of U.S. digital display inventory was comprised of online video in 2015. Many of these are distributed through Facebook’s mobile feed; Facebook makes three quarters of its total revenue through mobile, Norman said.
“We know so relatively little about the distribution usage of platforms [like Facebook] compared to what we know about the distribution of audience on TV,” he said. “We’ve been pushing those players for more transparency in those areas because it’s our general view that any business that is funded almost entirely by advertising has an obligation to the advertiser to [report] how their audience is distributed and how they use it.”
Unless companies like Facebook and Google become more flexible in sharing their data, agencies will continue to struggle to report video ad success.
But it’s not just thanks to these platforms that digital ad spend continues to rise. According to Norman, digital’s growth also comes from publishers’ ongoing transformation to fit in the digital ecosystem. Many are still evolving to combat ad-blocking and viewability concerns. Interaction states that 25% of consumers use ad blockers in the United States.
“There isn’t stratospheric growth in what we call the display market, but there has been enormous reinvention in traditional publishers like The Washington Post,” he said. “There are also the arrival of new places to tell highly valuable stories, like Refinery29 and Mic.com. They’ve found great audiences and made digital a legitimate form for content consumption. Growth will come from that.”
Norman said these same publishers have done a better job moving their content from digital magazine formats to the app environment, in turn making advertisers more comfortable spending on mobile.
According to GroupM Interaction, programmatic buys were transacted at a global average of 37% in 2015, up from 21% in 2014.
This story has been updated with a link to GroupM’s Interaction Report.
