Mobile made up a quarter of Canada’s online spend in 2014

IAB annual revenue survey shows gap widening between digital and TV

The Interactive Advertising Bureau of Canada has released its annual revenue report, which provides the clearest and most reliable data the industry has on how online media budgets were spent in the past year.

If 2013 was the year digital spend surpassed TV for the first time, 2014 was the year it widened the gap. Advertisers spent $3.79 billion on digital in last year, 13% more than they did in TV. Overall, digital spend was up 11% year-over-year. The IAB projects it will grow another 11% this year, to $4.2 billion.

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But the biggest story this year was that the bulk of online growth is now coming from mobile spending, which more than doubled in 2014 to $903 million. After two years of triple-digit growth, mobile now accounts for 24% of all digital spending in Canada. That’s on par with the U.S., where mobile currently makes up 25% of American advertisers’ digital budgets.

Apparently mobile is even beginning to steal budget away from desktop, which was down 3% versus 2013.

IAB president Sonia Carreno said that such rapid growth shows that advertisers are beginning to understand the urgency of the consumer shift to mobile. According to the IAB’s 2015 Canadian Media Usage Trends report, mobile devices now account for 52% of the total time that Canadians spend consuming media online and 19% of overall media consumption in all channels.

Many advertisers have held back on mobile because they haven’t had the tools to measure ROI in the channel, but Carreno says those barriers aren’t as high as they were a year ago. “The tools are in place, the inventory is in place now,” Carreno says. “There’s a level of security, that mobile has the kind of traffic numbers that are sought after.”

The past year has also seen greater emphasis on mobile from publishers and key technology players like Google, which has done a lot of work to improve mobile search ads and put more emphasis on mobile-friendly content, she said.

But there’s still a lot of work to do, especially when it comes to mobile experiences. Carreno says Canadian marketers haven’t done enough to adapt their websites and other online platforms to mobile, meaning customers that click on mobile ads end up on desktop sites they can barely read.

She said that’s largely been due to hesitation on the part of marketers, who have preferred to stick to platforms they’re familiar with and understand how to leverage. “Sadly as a result they’re leaving revenue on the table, from those mobile impressions that could have led to sales,” she said.

The IAB’s report’s category breakdown showed that search remains king of digital, up 14% to $2.1 billion (including both desktop and mobile). Display was up 17% to $1.3 billion.

Video saw the most channel growth, up 28% to $266 million, though it still only makes up 7% of overall digital spend in Canada. Carreno says she expects video to become more important as more TV dollars shift into digital, but that the Canadian market is also facing a shortage of premium quality video inventory – which could lead to a price spike in the near future.

The IAB annual revenue survey, conducted by Ernst & Young, is based on reported revenue from Canadian online and mobile publishers in the French and English markets.

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