Mobile is eating the desktop already
One of the things I keep hearing in media circles is that mobile is purely additive and doesn’t come at the expense of the core digital business. However, two new reports illustrate how mobile is eating the desktop in both traffic and revenue, fueling a new disruption for media companies that have yet to figure out how to monetize their mobile audiences.
The first report is a year-end traffic analysis by Nielsen. It reveals that all of the top 10 web brands in the US experienced declines in PC web visits: Google is down 6%, Yahoo dropped 9% and Facebook fell 16% — all in a single year.
These declines have more implications than just the numbers themselves: they’re sources of referrals for media companies. As the referrals shift more mobile — for example, 78% of Facebook’s visits are now mobile — the fewer social and search referrals will be sent to the desktop. The effect will only accelerate desktop’s decline.
Why does this matter if overall traffic is soaring, thanks to the mobile explosion? That’s where the second report comes into play. Mobile ad revenue is expected to finish the year with 120% growth, compared to just 1.69% for the desktop, finds eMarketer. Next year, the desktop is virtually flat, slumping into a decline in 2015 and beyond. By 2017, mobile ad revenue is forecast to surpass the desktop altogether.
“Mobile advertising continues to grow faster than expected, largely at the expense of desktop ad spending, which is flattening or declining more rapidly than previous predicted,” explains eMarketer, which keeps revising its forecasts to try to keep up with mobile’s astonishing growth.
For media companies that monetize mobile audiences at a fraction of the desktop — often with CPMs in the pennies — this is an immediate threat. As both advertisers and audiences shift away from the desktop simultaneously, overall ad revenue will decline. There is a boatload of mobile ad revenue, but it’s headed to companies like Facebook, Google and Twitter that can deliver on a high ROI with smartly-targeted ads.
This is why media companies must ramp up mobile investment more than ever, beefing up product teams that span content, UX, data and revenue — pivoting their cultures to adapt to the mobile-first reality. Video and sponsorships show particular promise, according to the eMarketer report, in addition to the skyrocketing growth of native advertising.
In the end, being platform-appropriate is not enough when you’re about to get clobbered by the biggest platform of them all. And if you need a little motivation, just start tracking your desktop decline.
(I work at Breaking News, a mobile-first company owned by NBC News).