Revenue Flowing Faster to New Marketing Channels, But Integration Is Key

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money tunnelJeff Hasen is a guest author. To contribute a guest post to Street Fight, contact us here.

There were many findings within a recent advertising report from the Internet Advertising Bureau that used the word “momentous.”

We learned that U.S. interactive advertising revenues for 2013 hit an all-time high of $42.8 billion. The report said that this “momentous” figure marks an increase of 17% from 2012’s landmark revenues of $36.6 billion. We were also told that digital exceeded broadcast television advertising revenues ($40.1 billion) for the first time ever.

And for the third year in a row, mobile achieved triple-digit growth year-over-year, rising to $7.1 billion during full year 2013, a 110 percent boost from the prior year total of $3.4 billion. Mobile accounted for 17% of 2013 revenues, whereas it was 9 percent of revenues in 2012.

But with all these findings come many questions. Here are just a few:

— Is the shift in dollars signaling a time when those of us in local will make an all-in bet on one or more channel (digital and mobile, for instance), and eliminate any marketing spend on others (radio, TV, for example)?

— Are consumers making – or will they make – a distinction between one channel and another? Or will they instead change how they use a channel, perhaps combining TV and a tablet for a two-screen, enhanced experience?

— Is it possible that these trends will be reversed? Or, said another way, can we expect so-called traditional media to adapt to meet consumer interest and to drive hyperlocal business through one-to-one digital and mobile extensions to its content?

Other numbers from the report:

 — Digital video, a component of display-related advertising, brought in $2.8 billion in full year 2013, up 19 percent over revenues of $2.3 billion in 2012. As a result, it also increased its share to become the fourth largest format, directly behind mobile.

— Search revenues totaled $18.4 billion in 2013, up 9% from 2012, when search totaled $16.9 billion.

— Display-related advertising revenues in 2013 totaled $12.8 billion or 30 percent of the year’s revenues, a rise of 7% over $12 billion in 2012.

— Retail advertisers continue to represent the largest category of internet ad spending, responsible for 21% in 2013, followed by financial services and closely trailed by automotive which account for 13% and 12% of the year’s revenues, respectively.

Randall Rothenberg, the IAB’s president and CEO, acknowledged the “momentous” shift as well as cross-screen activity that speaks to multi-channel consumer use: “The news that interactive has outperformed broadcast television should come as no surprise,” he said. “It speaks to the power that digital screens have in reaching and engaging audiences. In that same vein, the staggering growth of mobile is clearly a direct response to how smaller digital screens play an integral role in consumers’ lives throughout the day, as well as their critical importance to cross-screen experiences.”

Added David Silverman, Partner, PwC U.S., which conducted the study for the IAB: “Our survey confirms that we are fully in transition to the post-desktop era. Triple digit advertising revenue growth from mobile devices contrasted the more tepid 8 percent growth from traditional computer screens. This is simply a reflection of the change in how and where consumers are viewing their information—on the go!”

And then there was this from Sherrill Mane, Senior Vice President, Research, Analytics, and Measurement, IAB: “Digital marketing generates large reach and many possibilities to create impact across consumers’ purchase consideration processes, both critically important to advertisers as they seek marketing investments that have value.”

Through interviews conducted for my Mobilized Marketing book, and subsequent to those, it is evident that many who are succeeding at hyperlocal are integrating channels rather than eliminating them.

An example is Ford which saw a 15.4% lead conversion simply by adding a mobile call to action to TV spots. Viewers were asked to text in their zip code to learn of local loan offers in the area. Each who responded was asked if he or she would like to be contacted by a local dealer. Leads were handed off to eager salespeople in minutes.

Another example of “old school” still working is the fact that yard signs being used by local businesses to promote mobile text clubs. I looked at a dozen or so locations doing this. What I saw was that 96% saw increases in the number of opt-ins. All but two had double-digit growth and one third saw a boost of at least 50 percent.

Old and new are meeting all the time and not just on the ground. This week, I heard a 70-something ask a flight attendant to explain what “airplane mode” was for his mobile phone. She told him that he could keep it on “and play games.” While he thought that was interesting, he and his wife worked on a printed crossword puzzle or two for most of a three-hour flight.

The upshot? We receive lessons even at 33,000 feet. This one is one to remember — one size does not fit all.

Jeff HasenJeff Hasen (@jeffhasen) is chief marketing officer at Mobivity and author of the book, Mobilized Marketing: Driving Sales, Engagement, and Loyalty Through Mobile Devices. He has counseled businesses of all sizes, enabling them to define their mobile strategy, establish or further their mobile project roadmap, and identify additional business growth opportunities.