10 Jun 2019

The Case Summary:

U.S. adults this year will spend more time using their mobile devices than they’ll spend watching TV, per a forecast that eMarketer shared study findings & statistics.

The researcher estimated that:

  • the average time spent on mobile devices will grow 3.7% this year to 3 hours and 43 minutes a day, surpassing the 3 hours and 35 minutes spent watching TV.
  • Seventy percent of that mobile time will be spent on smartphones, or 2 hours and 33 minutes a day. That’s an increase of nine minutes — 7.3% — from 2018, but that annual growth will slow to 3.4% by 2021.
  • American adults spend about 40% of their daily digital video viewing time on mobile devices, reaching about 40 minutes a day.
  • Video is the third-biggest driver of growth in mobile app engagement behind listening to digital audio (53 minutes daily) and social networking (43 minutes).
  • TV time will drop nine minutes this year, while digital video time will increase by eight minutes, eMarketer forecasts.

Market Study Insights:

The growth in mobile viewership has gained momentum amid broad shifts in the way consumers spend their free time and how they use their smartphones to supplement TV viewing. Technological advancements — such as higher-speed mobile networks and bigger, sharper mobile screens — and the popularity of unlimited data plans have supported the growth in mobile video for on-the-go consumption. The expansion of next-generation 5G networks nationwide in the next few years likely will improve video delivery even more.

Meanwhile, millions of cord-cutting consumers have canceled their pay-TV subscriptions in favor of streaming services like Netflix and Hulu ​that not only provide on-demand video to connected TVs at home but also to their mobile devices while they’re on the go.

For mobile marketers, the growth of ad-free streaming services limits their ability to reach viewers. However, many broadcasters, cable networks, and tech companies have created video apps that show ad insertions during programming. For example, Hulu last week said 70% of its 82 million viewers subscribe to its ad-supported plan that charges $5.99 a month, half the price of the $11.99 ad-free version. Hulu generated almost $1.5 billion in ad revenue last year, Variety reported, pointing to how many consumers are willing to view some ads if it means lower subscription fees.

Meanwhile, Amazon this year launched an ad-supported streaming site called IMDb Freedive that’s available on the company’s website and Amazon Fire devices. Roku, the maker of set-top streaming hardware, updated its mobile app to let viewers watch content from the Roku Channel, which premiered in 2017 as an ad-supported service. YouTube has sought to grow its mobile ad business, and last month started testing a “Bumper Machine” that creates video ads optimized for mobile audiences. Meanwhile, social networks including Facebook, Snapchat, and Twitter also have ramped up their ad-supported video programming while trying to boost mobile engagement.

Research shows that mobile video ads are a key driver of digital media spending. U.S. mobile advertising grew 40% to $69.9 billion last year, making up 65% of total digital ad revenue, per an annual report by the Interactive Advertising Bureau and PwC. Digital video ads on mobile expanded 65% to $10.2 billion, outpacing the 37% growth for digital video in all formats, including personal computers. Mobile video ads are forecast to grow as high-speed 5G mobile networks expand nationwide over the next few years.

Source: “First Published On Mobile Marketer