Razorfish’s Paul Gelb: Mobile Ad Spend Will Overtake TV

Digital chief cites rocketing smartphone growth

There’s no question TV is beating digital in the fight for ad dollars. But digital ad execs don’t expect that to last long. Paul Gelb, Mobile Practice Lead of Razorfish, took it a step further: “I think mobile ad spend will overtake television,” he told Adweek in an exclusive interview at IAB’s Mobile Marketplace conference.

Mobile, he explained is the first truly mass media. His exuberance didn’t stop there: There are over three times the number of mobile subscribers as there are TV subscribers, he said. Globally, it’s the most adopted technology and media channel in history. The engagement rates are higher. And inventory, thanks to 24-hour access to users, is unmatched.

The shift may not take long, either, Gelb suggested. It’s only been four years since the first iPhone was introduced. “If you’d predicted then that smart phones could outsell PCs and that people would spend an hour a day on their phones, no one would have believed you.” Smartphones are one of the fastest technology adoptions in history, he said. 

Of course, TV ad execs only need to point to the scoreboard to counter Gelb’s point; mobile ad spend is predicted to top $1 billion in 2011, according JP Morgan. That’s a drop in the bucket compared to the $59 billion advertisers dropped on television in the U.S. last year.

Mobile is criticized for its fragmentation. Ad networks for mobile aren’t fully developed; there’s no one operating system and the analytics and ROI metrics for such a new industry are far from standardized. It apparently hasn’t stopped advertisers: “We don’t have a single client who is holding back for lack of measurement data,” said Mark Emery, Mobile Practice Lead at Definition 6.

That attitude is reflected in the growth of ad dollars. An IAB survey released today, titled Marketer Perspectives on Mobile Advertising, said 63 percent of the 300 brand executives surveyed reported in increase in mobile ad spend over the last two years; 29 percent increased their spend by more than 50 percent.

Gelb said Razorfish actively educates clients on the value of their mobile campaigns as a way to grab more ad dollars with each subsequent campaign. Many Razorfish clients are, he said, “past the experimental phase” of dipping into mobile—in part because of early successes. “We start every execution with a plan for creating an ROI case later on to secure more of the budget,” he said.

It appears to be working. Razorfish’s biggest challenge in mobile is keeping up with demand. The company’s mobile practice has grown from one person (Gelb) at its start to 45. “We can’t staff as quickly as we want,” he said. Note to TV execs—Razorfish is hiring. 

This story has been updated.