Global Mobile Ad Spends To Reach $41.9 Bn by 2017

by CXOtoday News Desk    Jan 21, 2014

mobile ad

Global mobile advertising spends is expected to reach a whopping $41.9 billion by 2017 from the about $13.1 billion last year, said research firm Gartner. In 2014 too, the mobile advertising market is estimated to grow moderately to $ 18 billion, said the research firm emphasizing that growth will be fueled by improved market conditions from 2015 till 2017.

Video to boom

Gartner predicts the display format will make up most of the revenue, but video will show the highest growth.

“Over the next few years, growth in mobile advertising spending will slow due to ad space inventory supply growing faster than demand, as the number of mobile websites and applications increases faster than brands request ad space on mobile device screens,” Gartner Research Director Stephanie Baghdassarian said.

However, from 2015 to 2017, growth will be fuelled by improved market conditions, such as provider consolidation, measurement standardization and new targeting technologies, along with a sustained interest in the mobile medium from advertisers, she added. Mobile display ad formats will be the single biggest category of ads, although this category is expected to shift to mobile Web display after several years of higher growth in in-app display.

The tablet form factor is also expected to drive video as adoption of the smart device market continues to grow. In addition, search/map ad types will benefit from increased use of location data gathered from users, either through them opting into being located automatically through their devices or because they proactively check in the places they visit using apps such as Foursquare and Pinterest, it said. “As a result, local advertisers will be more interested in the mobile channel as a means of pushing ads,” Baghdassarian said.

North America and Europe key markets

All regions of the world will experience strong growth in mobile advertising spend, although North America is where most of growth will come from, due to the sheer scale of its advertising budgets and their shift to mobile.

“North America is the region with the strongest general advertising focus and investment. It is also the region where online advertising is most mature,” said Mike McGuire, research vice president at Gartner. “Overall advertising budgets are the highest, so when a portion shifts to mobile, in a multiplatform approach, it immediately impacts the market’s scale.”

Western Europe’s market for mobile advertising will remain similar to North America’s, albeit at a slightly lower scale, for the duration of the forecast period. “The mobile channel will become more and more integrated into 360-degree advertising campaigns, eating up budget historically allocated to print and radio advertising,” said Ms. Baghdassarian.

APAJ to be a mature market

Asia Pacific and Japan is the most mature region for mobile advertising, and therefore growth will slow between 2012 and 2017, with an average of 30% a year. Historically, the unusually high adoption of handsets for digital content consumption in Japan and South Korea will lead to this growth. Looking forward, Gartner expects the high-growth economies of China and India to contribute increasingly to mobile advertising growth as their expanding middle classes present attractive markets for global and local brands.

In the emerging markets of Latin America, Eastern Europe, the Middle East and Africa, mobile advertising growth will largely track the technology adoption and stabilization of emerging economies, but will mostly be driven by large markets such as Russia, Brazil and Mexico. From 2015, growth rates in this region will exceed the worldwide average.