Where Consumers Spend Their Time Is Where Advertisers Should Spend Their Money

Mitch JoelPosted by

This was the argument that was debated over twenty years ago.

Why do we have to keep having the same argument? We love dogma, don’t we? Yesterday, Mary Meeker (from Kleiner Perkins Caufield and Byers) did her thing. And, “her thing” is one of the most important (and highly anticipated) reports on Internet trends. She brings it forth every year, and every year there is always tons of data that points to what consumers are doing and the huge gap between what they’re doing and how businesses are adapting (hint: it’s digital, baby!). Personally, I have been following her reports since the very early days, and use them as a compass for how to directionally adjust the function of Mirum, and how to better serve our clients. In the early days of this report, I remember thinking to myself that as these trends become more and more pervasive, and as the data becomes more widely accepted, that the information provided within it would diminish in value, because the gap between what users are doing and how businesses are connecting would shrink.

That is wrong.

There were two pieces of data from the Internet Trends 2015 presentation that need to be highlighted:

1. Mobile data usage rose 69 percent last year, and 55 percent of mobile data traffic is from video.

This may seem obvious, but the implications are astonishing. For years, companies like Cisco (and others who analyze the plumbing of the Internet) have said that once we get to the point that video can be delivered cheaply, in high definition and streaming across the network, that this would be the real moment of convergence. A true inflection point. The point in time when video content can be as easily served on a smartphone, as it is to your desktop cable box in your den. Well, we’re almost there. The one caveat, of course, is that data is still expensive, but that continues to adjust and will become cheaper and cheaper.

2. The mobile ad industry is still short $25 billion. Mobile commands 24 percent of time spent with media but accounts for only 8 percent of ad dollars spent. 

If I had hair… it would be on fire. We had the exact same thing happen in the early days of the Web. We saw this massive shift of consumers, time spent on the Web and the advertising dollars were not shifting at all. History repeats itself and, sadly, brands are failing to learn from their mistakes. Here it is… in cold, hard and plain facts. One quarter of a consumer’s time is spent on mobile, but only eight percent of all advertising dollars are placed where they are. Now, it’s easy to say that mobile advertising is not as sophisticated, powerful or even effective as television, print… or whatever. Still, there is a need for brands to do two things: reach the mass or reach the mass within their very unique niche. The equality of time spent and the media push towards it deserves an equalization.

The only thing holding brands back today is dogma.

There is no other way to explain it. Brands were so slow to adopt the Web as a media channel and raw business opportunity, that we’re close to two decades in and they are still struggling with what we, at Mirum, call digital transformation. Now, this. The data doesn’t lie. The usage – as well all know – is only going to increase in this area. Look no further than where the venture capital money is going. Look no further than where any significant investments are being done in the marketing space (it’s in technology, in case you were wondering). This data is not going to change course. It’s not going backwards. It’s going to increase. In fact, if I may be so bold, it is the data points of mobile time spent and the level of traffic that is going to eat everything. The technology and connectivity is going to get so much faster, better and cheaper that the idea of plugging something into a wall for connectivity will seem barbaric… or even having to have that content delivered over anything but the air. The idea that any device is not connected to the Internet will seem ridiculous. It is what it is.

The big question: when will brands learn?