News operations are discovering a digital fact of life that retailers have long understood: Consumers are rapidly shifting their lives to their smartphones, a device that means more convenience for users, but a smaller bottom line for those selling products and providing content.
For publishers, the shift means it’s harder to sell ads that traditionally have relied on the wide-open spaces of desktop monitors, The Wall Street Journal reports. It’s also more difficult for publishers to track, in a sophisticated way, advertising’s performance on mobile devices because all the necessary infrastructure isn’t in place.
The Journal story is further proof, as if any were needed, that the future is mobile. Some of the statistics in the report are stunning. Consider that the time readers spend on publishers’ mobile sites increased 40 percent during the year ending in July, the story says. In fact, according to the Journal, time spent on mobile versions of the publications now makes up 55 percent of the total time consumers spend with the digital news products, according to estimates by comScore. (ComScore apparently provided the Journal with a figure updated from this 2014 report.)
Money not following move to mobile
But as has been the case with retailers, consumers use of mobile is increasing rapidly, but the profits attributable to mobile are not following. The Journal lays out a couple of specific examples:
- The New York Times is now seeing more than half of visits to its digital properties coming on mobile devices, but mobile devices accounted for only 15 percent of digital ad revenue in the second quarter.
- Dow Jones & Co., which publishes the Journal and operates The Wall Street Journal Digital Network, is also seeing more than half of its visits coming from mobile devices, yet revenue from mobile makes up less than 20 percent of its total digital ad revenue.
All signs point to consumers’ growing comfort with mobile devices, including greater comfort reading on the devices, which should be a worry for publishers who are having trouble making as much money on the smaller format. Facebook’s Matt Idema recently laid out for a crowd of marketers at ClickZ Live in San Francisco the way mobile is changing consumer behavior.
Publishers are adjusting their advertising strategies. The New York Times plans to offer native advertising (or narrative form ads) containing general themes depending on the time of day the ads are served up, according to the Contently blog. And Salon, the piece said, has tried adding vibrations to advertisements, so that users could feel the explosions in a promotion for the TV show “Homeland.”
The gap between mobile readership and the percentage of revenue generated by mobile ads is reminiscent of the “mobile conversion gap” that has retailers scrambling to shift their strategies and the way they think about mobile. For retailers, mobile’s value goes beyond the conversion itself. While many are working to improve their mobile experience to encourage higher conversion rates, the idea of “mobile assist” is gaining prominence. The idea is that even if the sale itself doesn’t close on a mobile device, the mobile device might well have contributed to the eventual conversion, whether that happens on a desktop or in a store.
Mobile drives in-store buying
Deloitte Digital’s finding that mobile devices help drive $593 billion in in-store sales has been widely reported. It was part of the consultancy’s “New Digital Divide” study that concluded that overall digital is influencing $1.5 trillion in brick-and-mortar spending.
All of which points to the growing need to be able to understand consumers and measure success across devices.
In fact, that very need is what gives Facebook a considerable advantage in the mobile advertising game, according to the Journal. Because Facebook requires users to log in, it is able to reliably track users across various devices, as the Journal points out.
In the mobile commerce world, logging into a site is exceptionally rare. Only about 1 percent of users log in to retail sites on their mobile devices, according to BloomReach data, which means that e-commerce operations need to turn to other technology to tie a shopper to his or her various devices.
On the other hand, mobile commerce sites do have an advantage over publishers’ sites. As Deloitte found, a mobile site or app can play a key role in ultimately closing a sale. But for publishers, there is no second-chance to capture revenue from advertising that provides a revenue stream constrained by a lack of solid metrics and the small amount of screen real estate available.
And while smartphones in particular remain the least valuable platform for conversions themselves, eMarketer points out that key indicators are moving in the right directions. Specifically, in the first quarter of the year, smartphone conversions more than doubled year over year; average order values grew faster than on any other device; revenue per visit increased by 147 percent and cart abandonment dropped 3.4 percent, a much more positive change than for tablets or desktops.
Granted, those numbers are moving for a relatively small base, but taken together they provide a brighter picture for e-commerce sites looking at the relationship between smartphones and profits.
Mike Cassidy is BloomReach’s storyteller. Contact him at email@example.com; follow him on Twitter at @mikecassidy.