The advertising and marketing industry has undergone significant changes over the last 20 years. The rise of the internet era led to a divergence of consumer attention away from traditional forms of media toward digital mediums instead. While being connected to the internet via personal computers was significant in and of itself, the increased connectivity that smartphones have enabled created an even more dramatic shift. As a result, smartphone advertising is now an integral part of brand marketing campaigns.

Key Takeaways

  • The internet introduced the concept of digital advertising, while the rise of the smartphone brought it into the mainstream.
  • Increasingly widespread of use of smartphones among consumers forced marketing and advertising firms to rethink their messaging approach.
  • Digital ads on mobile now represent a significant share of internet advertising spending; approximately $7 of every $10 ad dollars go to mobile advertising efforts.
  • Smartphone advertising continues to evolve as marketers attempt to adapt to a changing landscape that will soon include the death of the third-party cookie.

Rise of the Smartphone

In June of 2004 the Economist magazine published an article describing the changing nature of the advertising and marketing industry, calling the then-current period “one of the most disorienting periods in its history.” Traditional forms of advertising and marketing were no longer delivering due to the increasing diversity of media and the emergence of new technology, most notably the internet.

According to a 2019 report by the research firm eMarketer, as people spent more of their time going online to shop, be entertained, and seek out a variety of digital information platforms, such as computers, tablets, and mobile phones the traditional forms of advertising and marketing, such as television and print forms, were displaced. Today, people are connected to the internet at any time and from anywhere, and it is primarily the smartphone that is responsible for this ubiquitous connectivity.

According to the Pew Research Center, as of 2021, 85% of Americans now own smartphones, up from just 35% in 2011. Smartphone users are more likely to be under the age of 50, college graduates, earn $75,000 per year or more, and live in urban areas. Both men and women own smartphones in equal numbers. Understanding the various demographics regarding people who use smartphones and how they use them has become a vital part of how marketers advertise products or services to target audiences.

15%

The percentage of Americans who exclusive rely on their smartphones for access to the internet

The Smartphone Effect on Marketing and Advertising

The shift toward increasing smartphone usage that began in the early 2000s meant that advertisers and marketers had to adjust their strategies and campaigns accordingly to accommodate for mobile. For instance, companies without a mobile-friendly website risked losing valuable exposure on Google Inc.'s (GOOG) web search queries. That’s because in 2015 Google changed its algorithm so that more mobile-friendly websites received priority placement for search queries made on mobile devices, a change that some in the press dubbed “Mobilegeddon,” according to the Huffington Post.

Another lesson marketers and advertisers had to learn was that smartphones are not only receivers but also transmitters of information. Smartphones have become huge repositories of information on individual tastes and preferences. This means advertisers and marketers had the ability to be much more specific in their advertising and marketing campaigns and were able to offer more-relevant messages to different types of groups or individuals than they were in the past.

While this meant that consumers were expecting this increased relevance from brand advertising, it also meant that consumers increasingly began to expect relevance when and where it is needed. Consumers were more frequently consulting their smartphones to help them make everyday decisions. A 2015 Wall Street Journal survey found that 91% of smartphone users would look up helpful information on their phones while trying to complete a task. And according to Google data from 2015, 69% of smartphone users looked for travel ideas while waiting in a line or for the subway, and 82% of users turned to their phones when deciding whether or not to buy a specific product while standing in a store.

The speed and relevance of advertisements are now of utmost importance for brands to make an impression that will influence the decision-making process of potential consumers. In 2020 mobile advertising accounted for an approximately 70% share of all internet advertising revenues. In other words, $7 out of every $10 spent on advertising went to mobile ads.

Video may represent the future of smartphone marketing. In 2020 digital video advertising increased by 20.6% over 2019, with mobile accounting for the majority of growth.

What’s Next for Smartphone Advertising

As the smartphone continues to be a regular feature of daily life for the majority of Americans, marketers and advertisers may feel more pressure than ever to keep up with evolving trends. For instance, Google’s decision to eliminate the third-party cookie is expected to reshape internet advertising, including smartphone marketing, on a broad scale.

The move, announced in early 2020, would eliminate support for third-party cookies on the Google Chrome browser. According to Google, this decision is driven by an ever-increasing awareness of the need to protect the private information of consumers and how it’s used, including when it’s collected for advertising and marketing purposes.

That’s good for consumers but problematic for advertisers, because tracking cookies makes it possible to target marketing efforts. If an advertiser is no longer able to track a consumer’s movements across the web via third-party cookies, its ability to created targeted ads is diminished. Digital advertisers may once again find themselves having to evolve with the times in order to keep up, much as they did in the early days of the smartphone’s arrival.

While Google had planned to end the use of third-party cookies in 2022, it has now been pushed back to 2023.

The Bottom Line

Smartphone usage will only continue to grow as more Americans rely on them. Understanding how and when consumers are using smartphones is crucial for companies when fine-tuning their advertising and marketing campaigns. As smartphone data collection and analysis technology continually become more sophisticated, the speed and relevance of ad and marketing campaigns will be significantly more important. The key is to reach consumers with a relevant message at the right time through the appropriate mobile channels.