By the end of the year, mobile advertising spending will eclipse the amount of money that companies spend on old media like radio and newspapers. This historic shift shows just how far smartphones and tablets have come after less than a decade of existence. In contrast, newspapers have been in circulation for centuries while radio has been a media fixture for nearly 100 years.
Analysts estimate that companies will invest nearly $18 billion in mobile ads this year while newspapers and radio stations will earn $17 billion and $15.5 billion respectively. While mobile ad spending just edges out newspaper marketing, there’s no doubt which form of media holds a firmer grasp on consumers’ attention. Americans spend 25 percent of their media time using mobile devices and only 2 percent of it reading newspapers. Nevertheless, the broadsheet accounts for 10 percent of overall ad spending. Experts say that continued reliance on old media marketing is reflective of companies’ unwillingness to change their ways. Still, many marketers claim that advertising in print and radio provides a unique impact for certain retailers and connects better with purchasers of luxury goods. After all, where would an expensive Rolex watch look more appealing: in a slick full-page ad in GQ or as a sponsored Facebook post?
A growing number of small business owners are questioning the effectiveness of the latter option. Not only are Facebook ads becoming more expensive, but also the sheer amount of information uploaded to the site means that ads are also receiving less exposure. The average price per ad on the social network rose 123 percent last year while the number of ads the site displayed declined by 25 percent. Simply put, companies are paying Facebook more money to give them less exposure. Not only does this put companies with limited budgets and staff at a disadvantage, it also defeats the purpose of social media’s original marketing appeal. Small companies were initially drawn to Facebook because it allowed them to connect with consumers inexpensively. Now, the social network risks alienating these stakeholders by letting them get washed away in the site’s sea of information.
Questions:
- Will “old media” like newspapers and radio become obsolete?
- Are small companies likely to get “crowded out” of promotion on Facebook?
Source: Steven Perlberg, “Mobile Ads Breach Historic Barrier,” The Wall Street Journal, July 22, 2014; Sarah E. Needleman and Jack Marshall, “Facebook Ads Become ‘Costlier’ Choice for Small Businesses,” The Wall Street Journal, August 6, 2014. Photo by: Maria Elena.