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Industry Trends

Forecasting The Growth Of Mobile Advertising

By January 28, 2008July 30th, 20236 Comments

Forecasts about the growth of the mobile advertising market vary wildly from month to month and from one analyst to another. In an attempt to add some clarity to this confusion, Advertiser Perceptions have carried out a survey of marketers and media buyers to generate insight into their advertising plans for the near future.

The results of the “Wave 8” market survey by Advertiser Perceptions bring a mixture of good and bad news for the mobile advertising industry. About 55 percent of marketers plan to increase their budgets on mobile spending in the next 6 months, indicating that there is a healthy level of enthusiasm in the market.

However, less than half the participants in the survey, consider ‘interactivity’, which is a strength of mobile advertising, to be an important criterion when deciding their budgets for advertising. On the other hand, these advertisers consider ‘reach’, which is a weak point of mobile advertising, to be the number one criteria.

Mobile Internet usage needs to increase and attain levels comparable to other forms of media before platforms and publishers can expect advertisers to invest substantial sums in this medium. Among other things, mobile companies will have to facilitate cross-operator inventory, and a consistent audience measurement system to lure advertisers.

Growth Predictions

Analysts and industry leaders seem unabashed about their enthusiasm for the future of mobile advertising. Sterling Market Intelligence forecast mobile advertising revenues will reach $5.08 billion in North America and Western Europe by 2012. Thomson Financial predict Google’s 2009 mobile ad revenue alone will reach $21.31 billion. Gartner predict that the worldwide mobile advertising market will grow from $895 million in 2007 to $14.6 billion in 2011, while the Kelsey Group forecast that the US mobile ad market will grow from $33.2 million to $1.4 billion in 2012. Forrester are the most conservative, predicting less than $1 billion in mobile ad revenue by 2012.

In brief the results of the Wave 8 report show

  • 70% of mobile advertisers use text messaging
  • 31% of advertisers use video ads
  • 36% of mobile marketers use mobile search
  • 45% say they intend to start mobile search in the next 6 months

Google’s Optimism

According to eMarketer there are 405 million mobile internet users and the figure is likely to double in just about 4 years. This huge potential market and its steady growth is what fuels Google’s continuing desire to rule the mobile ad space. They are obviously relying heavily on mobile to drive a chunk of their future growth. This would explain why Google CEO Eric Schmidt dismissed Forrester’s conservative predictions for the mobile ad market and said “(The mobile Web) is the recreation of the Internet, it’s the recreation of the PC story and it is before us — and it is very likely it will happen in the next year.”