IPG: Mobile Key To Agency Growth

New research from Ernst & Young indicates that 88% of TV viewers say they multitask with a computer while watching TV. And nearly half of viewers say they are on their mobile phone while watching TV.

In a panel discussion in New York Tuesday put on by Ernst & Young to discuss its research, Interpublic Group CEO Michael Roth mused: “Our lives are blurring from a device standpoint.”

For clients, that’s both a blessing and a curse, he said, noting that commercials “give you a break” from watching content, and that allows viewers to check emails or go online to view content that may or may not be related to the TV programming.

The challenge for advertisers and agencies, he added, is to make commercials that engage viewers so they don’t completely disengage with the TV set.

Mobile technology, said Roth, is key to the company’s future growth -- given that in many markets, mobile has bypassed other technologies to become the primary communications means for consumers. “We’re getting double-digit growth in emerging markets” like China and Brazil, said Roth, adding that those growth rates will continue.

Smartphones will be the core device that integrates other forms of communications, he said, adding that consumers are using smartphones more frequently to access the Internet than computers.

But there’s a “disconnect,” said Roth, between the amount of mobile usage -- which is soaring -- and ad spending in the space, which is lagging. He likened it to the same gap that occurred when Internet usage first took off a decade ago. It took a while for advertisers to shift significant amounts of money from traditional media, which was being used less, to digital. Just as that gap has narrowed, so will the gap that now exists on the mobile front between consumer usage and ad spending.

The Ernst research also found that the average home in the U.S. now has four devices connected to the Internet, an average that will likely climb half again in just two to three years.

Michael Fries, president and CEO of cable company Liberty Global, responded that the more devices households have connected to the Internet the better -- at least for his business. "I want 10 devices in the home because [consumers will] need a bigger pipe," to connect to the Web. He predicted that in three years' time, providing subscribers with Internet connections will constitute 40% of Liberty's revenues.

~Steve McClellan - OMD