Mobile driving increased digital advertising spending in the US

U.S. companies are spending more on mobile media advertising than ever before.

Posted on Jul 2, 2014 by YuMe

Brands spending money to reach consumers through advertising isn't a new concept. However, companies today don't rely solely on television and radio when it comes to marketing to consumers. Companies have had to adjust their strategies and the result can be seen in increased advertising investments.

People have grown extremely reliant on mobile devices such as tablets and smartphones, in addition to laptop and  desktop computers. Considering that video is one of the best ways to make an impact with consumers and influence their buying decisions, companies have to use multi-screen video advertising in their marketing strategies, which contributes to the growth in marketing spend.

According to eMarketer, companies in the U.S. are expected to spend $180.12 billion on advertising this year. The website states this total represents a 5.3 percent increase over the $171.05 billion spent in 2013. This growth also represents the highest seen in a decade. The website expects a steady upward trend in this area over the next four years, and by 2018, media ad spending is predicted to top out at $220.55 billion.

How mobile contributes to increased spending on advertising
Television remains most popular option for brands to connect with consumers through the use of video advertising. In 2014, companies will spend $2.19 billion more on TV advertising than they did last year, a 3.3 percent increase, eMarketer states. However, mobile's continued rise in popularity will lead brands to focus a majority of their budgets on creating advertising campaigns that can be viewed on smartphones and tablets.

The eMarketer report states that U.S. companies will spend 83 percent more on advertising on mobile devices this year than they did in 2013. All told, $8.04 billion will be spent on mobile media advertising initiatives this year, making it the third-largest advertising platform, trailing TV and the Internet.

Video game makers to increase spending on video advertising
Two rival video game console makers will spend more to advertise their products this year, according to Benzinga, a financial media outlet. The website states that Microsoft and Sony have both spent significant amounts to market their brands from January through May.

Benzinga states that Microsoft spent $34.7 million on television advertising, while Sony spent $59 million. However, in fiscal year 2014, both companies combined are expected to spend nearly $225 million on video ads for TV. The upcoming holiday season will be a key cause for this additional investment, as Sony continues to market its PS4 console and Microsoft does the same with its Xbox 1, according to Benzinga.

Ad spending during the Winter Olympics saw a significant increase
Not only is the 2014 World Cup a key sporting event for brands to include in their video marketing strategies, the Olympics attracts millions of viewers that marketers are also looking to connect with. According to USA Today, citing research conducted by Kanter Media, the Winter Olympic Games that recently took place in Sochi, Russia, generated $39.9 billion in advertising spend. This led to a 5.7 percent growth in total spending on advertising in the first quarter of the year, and television was the platform that advertisers spent the most money on.

These examples show how valuable digital video advertising can be when it comes to reaching consumers. Brands understand that with so many people watching at once, it represents an opportune moment to market their products and services in the hopes of influencing them to make purchases.

Companies already know that there are now more ways than ever to make an impact on consumers. Failing to capitalize on them can result in stagnant revenue growth and put a company at a disadvantage compared to its competition that may already be increasing investments in video marketing strategies.