We are also making longer term investments that we believe will be important for Facebook and the ad industry. In Q3 we re-launched Adlesse, closed our acquisition of Liverail and rolled out our audience network. I want to spend a few minutes discussing our longer term ad tag strategy. We are investing in ad tag for simple reason. Consumers re shifting quickly to mobile and the advertising industry are not keeping up. 2013 was the first year the average American adult spent more time on digital media than watching TV and that gap had continued to grow. Today the average adult in the U.S. sends nearly 25% on their media time on mobile but advertisers spend only about 11% of their budgets there.
One of the main reasons the budgets are not moving as quickly as consumers is that advertisers haven’t yet had an effective way to serve ads and measure their returns on mobile. Current solutions work well for one person with one device, especially a PC and for sales that happen online. But today people often have multiple devices and still make many purchases in physical stores. Nealson OCR data shows that the digital industry is less than 60% accurate in demographic targeting of ads which means that 4 in 10 people are seeing the wrong ads. Similarly, marketers are not confident that they can measure mobile ad performance. Many of the most commonly used measurement systems over emphasis the value of the last click. This does not make sense given that studies of Facebook campaign shows that over 90% of ad driven in-store sales come from people who saw an ad but didn’t click on it. It is clear that marketers and publisher need better tools for the mobile world. This is an industry problem that we believe we are well placed to solve.
Our re-launch of Adlesse last month during AdWeek was an important early step that builds on the advancements and measurements that we have made over the past years. The new Adlesse is an ad serving measurement platform we completely rebuild. By using Facebook data Adlesse can deliver highly relevant ads regardless of device. Adlesse is also able to provide accurate measurement by connecting online marketing to in-store sales. Importantly Adlesse does all of this in a privacy protective way. Neither Adlesse, nor Facebook tells marketers who you are. At AdWeek we had productive conversations about Adlesse with many marketers and agencies. We are pleased with their interest.
We are also investing in additional piece of our ad tag platform. Our audience network improves the relevance of apps inside mobile apps. Liverail provides tools for publishers to enable personalized marketing at scale in either apps or websites. We believe Liverail can build our new success and desktop video to become a great solution for mobile publishers. I want to emphasis that the investments we are making on ad tag are long term. These are large and strategic investments. The payouts will take time but we think they provide the necessary foundation for the advertising industry to make the shift to mobile and for Facebook’s long term progress.
