In her annual internet trends report, released last week, Kleiner Perkins Caufield & Byers partner, Mary Meeker pointed to a gap in the monetization of mobile users in the U.S. Time spent on mobiles had increased to 28% of total media consumption time in 2016, while advertising agencies were only allocating 21% of their spending there. Meeker thinks that this is a huge opportunity waiting for online advertising platforms like Facebook, Snap chat, and Alphabet Inc.’s Google.
Forrester researchers expect advertising spend to more than double from 2016 to 2021. As of May 2016, the researchers pegged mobile advertising spending at 48% of online advertising spending in the U.S., which they expected to grow to 70%.
Facebook has said it plans to decelerate the ad load on the Facebook newsfeed in the second half of the year, which could impede its opportunity to grab a great deal more from mobile advertising on its core product. Instead, analysts expect the company to place greater emphasis on the monetization of other apps like Instagram.
That could leave room for Snap, as the social media company works to increase its average revenue per user and recover from a large net loss in its first quarter as a public company. Snap’s strategy has been to extract more money from its small but engaged user base, rather than compete for more users with the likes of Facebook.