It’s one of the oldest maxims in advertising—wherever the eyeballs are, the dollars will follow.

Almost everyone in the mobile advertising industry knew this day was coming. In what’s being described as a watershed moment, digital ad spending in the United States has exceeded $100 billion for the first time ever.

According to the most recent report from the Interactive Advertising Bureau (IAB), a total of $107.5 billion was spent by marketers in 2018 on digital advertising. The IAB calls it a “record-breaking” spend, and it represents a 22 percent growth in year-over-year spending ($88.3 billion in 2017).

Even though trends have been pointing in this direction for some time, this is still positive news for the industry. It’s a reflection of where the consumer mindshare is. it started with desktop computers and quickly moved to mobile “smartphone” devices in a big way and, of course, now also includes video, “connected TV”, smart speakers, and digital out-of-home (outdoor advertising).

But, the growth has been dominated by mobile and video. According to the IAB, mobile accounted for nearly two-thirds of internet ad revenues (65 percent). Mobile saw a total spend of $69.9 billion, up from 50.1 billion in 2018, a 40 percent increase. Digital video saw an increase of 37 percent, rising from 11.9 billion in 2017 to $16.3 billion in 2018. It reflects the ability that marketers have, through all the digital options available, to build a direct relationship between consumers and brands through mobile.

One of the big reasons digital advertising is increasingly “sticky” and effective, especially from a mobile perspective, is because of drastic improvements in how fast and easy it is for users to use and navigate through content on a smartphone. Optimal speed in loading pages via mobile along with a smooth and silky user experience are the founding principles of good mobile marketing. These attributes go a long way to delivering increases in readership, traffic and user engagement which is obviously attractive to brands and has influenced the direction of the dollars they spend.

The introduction of 5G into the marketplace will bring lightning-fast speed, ever larger decreases in latency, and even smoother user experiences. And as page speed potential increases, Google will start to reward pages built with the leanest code, that can match these speeds. We can’t even yet imagine the possibilities of e-commerce on smartphones and tablets when 5G is up and running. It will foster greater innovation in advertising formats, which will lead to even greater digital growth.

So the mobile evolution fuels the growth in ad spending, the money will continue to follow the eyeballs. Social media will continue to play its role in fueling this growth. The IAB report said the social media platforms are expected to reach 2.7 billion users worldwide this year and found that revenue for social media grew by 30.6 percent from 2017 to 2018 to $28.9 billion. Those are committed eyeballs to say the least, the kind advertisers crave.

The Other Side Of The Story

While publishers and adtech providers may celebrate this milestone, this influx of ad revenue will also bring some challenges, not least of all maintaining these levels of growth in the coming years.

The market is flooded with $7.2 bn of venture capital funding at the moment, but there are numerous examples of companies struggling to compete in an increasingly cut-throat marketplace. The growth—and the $100bn milestone—fires the starter pistol on the race to create true, measurable standards for the ad tech industry.

It will also spark the consolidation and rationalization of fragmented ad tech service providers, and the integration of other platforms such as voice, audio, and connected TV— where market leaders are yet to emerge and prove they can operate at scale.

Maintaining expansion also comes with risks for advertisers, such as adapting their practices to the General Data Protection Regulation (GDPR) and future updates as user privacy regulation changes.

So, while digital ad spend may be on an upward trajectory, companies aiming to profit from this spending have to demonstrate increasingly justifiable value to capture market share.

This relies on finding the delicate balance between effective, demonstrable ad value and maintaining the user experience that keeps readers coming back to view more and more ads.

Alexian Chiavegato is the chief marketing officer of Barcelona-based cloud-solution company Marfeel

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