There is little doubt that the mobile landscape is the future of advertising. A recent announcement made by Facebook, which stated the company’s efforts to intensify its focus on mobile, reflects the large revenue potential of mobile as an advertising channel. According to Facebook, 488 million users access the service via mobile phone or tablet.
What is even more interesting is that around 83 billion users use only mobile devices, as opposed to computers. Google also announced a number of new features to tap into the mobile advertising market by improving upon mobile search and mobile app advertising.
The increasing focus placed on the mobile market by these companies can be justified by the recent findings published by 2 different research companies. Below is a quick summary of some of the key trends and statistics in the mobile ad space, as published by various agencies in the past two months:
• IAB came out with its annual findings earlier this month and suggested that mobile experienced the fastest growth of all categories, demonstrating a growth of 149 percent from $0.6 billion in 2011 to $1.6 billion in full-year. Mobile is therefore taking over the online search advertisement market in terms of growth pace.
• A new forecast from Strategy Analytics claims that mobile ad spending worldwide will grow by 85% in 2012 from $6.3 billion. According to the research firm, mobile advertising will grow even faster in the US, more than doubling (up 128%) to just under $4.2 billion.
• The mobile advertising growth will be primarily driven by in app advertising – according to the Strategy Analytics, advertisers will spend $2.9 billion on in-app advertising this year, while consumers will spend $26.1 billion purchasing them. The number of apps downloaded in 2011 increased by 38% from 23 billion to 32 billion, making it the second-largest revenue category for both consumer and advertiser spending. In-app display ad revenue has surpassed mobile Web advertising in the U.S. and major Western European markets by $1.7 billion, to $935 million.
• Mobile internet usage is surging as well. Research by Google and the Mobile Marketing Association (MMA) revealed that Australia, the UK, Sweden, Norway, Saudi Arabia and the UAE have more than 50% of their population on smartphones, and an additional seven countries, including the US, New Zealand, Denmark, Ireland, Netherlands, Spain and Switzerland have more than 40% smartphone penetration. Mobile search has grown 500% in the past two years.
• Smartphones are also evolving as critical shopping tools. According to Google 96% users having researched a product or service on their device, and 35% of smartphone users having made a purchase on their phone. The IAB Mobile Phone Shopping Diaries also hints growing mobile shopping interest among consumers. In a survey conducted by them, the majority of respondents (70%) agreed that mobile advertising is a welcome personal invitation from brands, rather than an “invasion.” In addition, half (51%) of those same respondents said they want the mobile ads they click on to allow them to browse the brand or company’s broader product offerings.
• Mobile video advertising is also seen to increase, with the number of videos watched almost tripled to 280 million. However, according to Strategic Analytics, despite 23.8% sales growth, video is likely to account for just 2.4% ($3.6 billion) of total mobile media dollars in 2012. Of that amount, advertising will account for only about 20%.
The various studies indicate a clear trend – mobile is undoubtedly the future. There is a lot of money to be made on mobile platforms. Increasing popularity of smart phones and tablets coupled with surge in mobile internet and social media activities on mobile add to the potential of mobile as a revenue churner for brands, retailers and media companies.
Head of Media and Entertainment