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Underspend on mobile is $22bn

News, 03 June 2016

NEW YORK: It's long been the case that marketers' spending on mobile hasn't matched the time people spend with the channel, but the gap of $22bn in the US alone, identified by Mary Meeker in her latest internet trends report, still comes as a something of a surprise.

While trends in the proportion of time spent on the internet and the proportion of online adspend to the all-media total are in line – at 22% and 23% respectively – advertising expenditure on mobile is half what might be expected, with only 12% of spending allocated to this channel, despite consumers spending 25% of their media time there.

The other media channel featuring a major disconnect is print, where consumers now spend just 4% of their media time, although it continues to command 16% of adspend.

Meeker also highlighted the reluctance of Millennials to use their phones for talking: just 12% of this age group prefer to speak to businesses via phone, compared to 29% of Gen X and 64% of Baby Boomers.

Web chat and social media (both 24%) are the preferred options, closely followed by electronic messaging (21%) and smartphone apps (19%).

Smartphone usage among younger consumers is increasingly about the visual medium, using the device's camera and access to social media platforms to tell stories.

Brands are tapping into this trend, offering branded lenses, for example. The average Snapchat user plays with sponsored lenses, such as those created by Gatorade for the Super Bowl or Taco Bell for Cinco de Mayo, for 20 seconds.

The other major trend in smartphone usage noted by Meeker is the use of voice commands. Between 2013 and 2015, the proportion of US smartphone owners using voice assistants at any time more than doubled from 30% to 65%, largely due to a combination of increased awareness and better technology.

Speech recognition rates on the major platforms are now at 90% or more and, as they approach 99%, most people will be using voice commands as a matter of course.

The ability to operate to use a device when both hands and vision are occupied is the main benefit cited by those using the facility.

And the voice trend isn't restricted to smartphones as sales of the Amazon Echo demonstrate. This voice-controlled interactive speaker is both meeting consumer needs and reshaping certain habits, as users learn to delegate tasks to the device.

Data sourced from KPCB; additional content by Warc staff