Digital Ad Spend to Surpass Print in 2010 for First Time

For the first time ever, advertisers will spend more on digital than print, according to a new study by Outsell released today titled “Marketing and Ad Spending Study 2010: Total US and B2B Advertising.” But mobile marketing isn’t quite ready for the spotlight yet, and will see a spending decline in the coming year. The study finds that advertisers will spend 16% less on mobile in 2010.

Of the $368 billion marketers will spend this year, 32.5% will go toward digital, 30.3% will go towards print. “It’s a watershed moment,” lead author of the study and Outsell vice president Chuck Richard told However, in regards to mobile marketing, “the proof isn’t in yet that mobile spending is all that effective,” Richard adds in the article. He gives the example of the Sports Illustrated swimsuit iPhone app which was the 33rd-highest-grossing mobile app in the iPhone store — 32,000 people paid $2 to download the app, netting $64k. However, one page of advertising in the issue makes $135,000. Richard obviously isn’t a fan of mobile marketing. “It’s time for a reality check,” he says.

But mobile marketing isn’t just about iPhone apps, and comparing the amount of money made from an iPhone app to the money made from print advertising is comparing apples to bananas. If you’re a brand, you don’t necessarily build an iPhone app just to make money from that app. The app may also be for increasing brand loyalty and seen as a digital PR move. Also, iPhone apps can make money later with in-app advertising that makes the app download fee worth more than the original purchase price.

The Outsell study collected data from 1,008 US advertisers in both consumer and B2B that marketers in December 2009. Stats that advertisers will spend 16% less on mobile in 2010 might scare mobile marketers, but it’s a natural pause after a growth spurt in the industry. Over the past year, there was a lot of excitement and experimentation in mobile marketing and advertising, and likely advertisers had unrealistic expectations in ROI in a still young smartphone market.

In the year’s to come, mobile advertising spend will likely go up. That’s according to me, not the Outsell study. The reason for this? Mobile is more than phones, and in the coming years we’ll see mobile-connected devices become more popular in the mainstream. Tablets, netbooks, portable network-connected gaming devices (like Sony’s upcoming PlayStation phone) will allow the rise in digital ad spending to leak into mobile and grow mobile ad spend in the next decade.