With smartphone ownership among Millennials and Gen Xers reaching at least 90%, and as smartphone adoption with older consumers continues rising, businesses are allocating more of their marketing budgets to mobile. Indeed, the most recent report from The CMO Survey has revealed that the share of marketing budgets dedicated to mobile has exceeded social for the first time.
Mobile currently accounts for 13.5% of marketing budgets, per the survey of US senior marketers at for-profit companies, up from 11.2% a year ago. Since the second half of 2016, mobile’s portion of marketing budgets has steadily increased to the point that it has now surpassed spending on social media (13.3% share in this latest survey).
It also looks as though mobile marketing spending will continue to exceed social media spend in the next 5 years, during which mobile investment is expected to see growth of almost 73% and account for 23.3% of marketing budgets, compared to social media’s 21.5% share.
B2C companies will lead the way, as they expect to allocate almost one-third of their budgets to mobile efforts in the next 5 years.
That said, mobile and social are greatly intertwined. The largest portion of mobile marketing budgets is being directed towards social ads (25.6%). This is especially true when it comes to B2B Services companies, for which social ads account for an average of 30.1% of mobile spend. By comparison, other company types – B2B Product (22.4%), B2C Product (25.3%) and B2C Services (24.7%) – allocate about one-quarter of their mobile budgets to social ads.
Some 18.5% of mobile marketing budgets are being allocated to user experience where, again, B2B companies are concentrating more of their mobile efforts than their B2C counterparts.
B2C companies, for their part, are allocating more of their mobile budgets to display ads and video ads than are B2B companies.
Challenges to Mobile Success
Although businesses are designating more of their marketing budgets towards mobile, as well as increasing their investment in mobile marketing data, they continue to face several obstacles.
The most widespread challenge limiting the success of firms’ mobile marketing activities is tracking the customer across the journey, as cited by more than 4 in 10 (42.2% of) respondents. The lack of sufficient in-house mobile expertise (35.8%) is another challenge, as are unclear objectives for mobile marketing strategies (33.5%).
Fewer respondents say they are limited by the difficulty in identifying their mobile customer audience (26%), in addition to citing an undisciplined approach to monitoring mobile metrics (22%). Added to this, other recent research shows that marketers lack confidence in measuring mobile advertising’s effectiveness when it comes to metrics such as conversions, impressions, interactions, and viewability.
Mobile’s Contribution to Company Performance
Even given these challenges, however, mobile’s contribution to company performance has increased, albeit slowly. The 265 US marketers surveyed were asked to rate mobile marketing’s contribution to company performance on a scale of 1 to 7 (1 = not at all, 7= very highly). On average, respondents rated it at 3.2, which is up from 3.0 in February 2019 and 2.7 in February 2018. (Bear in mind that 3.5 is a middling level on this scale, so there’s plenty of work still to be done.)
B2C Product businesses rated mobile’s contribution to performance the highest, at a level of 4.2, followed by B2C Services (3.8) companies.
By contrast, both B2B Product and B2B Service companies rated its contribution lower than average, at 2.8 each.
Finally, with previous research showing that mobile drives more traffic to e-commerce sites than desktops or tablets, it’s no wonder that companies with at least 10% of their sales coming from the internet give mobile an above-average rating (4.1) for contribution to firm performance.
The full report can be found here.
About the Data: Report findings are based on a survey of 265 top US marketers, 98% holding the position of VP or above. The survey was fielded in January 2020.