Boom time for mobile ad industry

Boom time for mobile ad industryThe global mobile marketing and advertising market is poised to hit 27.9 billion euros ($38.3 billion) in 2018 registering a compound annual growth rate (CAGR) of 26 per cent compared to 6.9 billion euros in 2012, said a report.

This will then correspond to 19.3 per cent of the total online advertising market or 5.9 per cent of the total global ad spend for all media, according to a report by Berg Insight, which offers premier business intelligence to the telecom industry.

On a global level, mobile search advertising is estimated to represent the largest share of more than 50 per cent of the total mobile ad spend, followed by display advertising and messaging.

There are however considerable regional differences in the format distribution depending for example on the level of maturity and local preferences across markets.

“There is currently a mismatch between the ad dollars spent on different media and the share of time consumers devote to the various channels”, said Rickard Andersson, senior analyst at Berg Insight.

Some channels such as print media, he said, receive a greater share of the total ad spend than can be motivated from a consumer behaviour standpoint while other channels receive too little investments.

“Mobile devices are on average devoted a double digit percentage of consumers’ time, yet the channel only attracts a few percent of the total global ad spend”, stated Andersson.

“This discrepancy can be explained by the relative newness of the mobile channel as an advertising medium and the formidable growth of mobile media consumption in recent years. Berg Insight expects that a correction in the ad budgets spent on different media is imminent, thus paving the way for a severalfold increase in mobile ad spend in the coming years,” he noted.

Numerous actors are involved in activities related to mobile marketing, including players from diverse backgrounds. Google has captured an important position, offering a range of mobile advertising alternatives such as mobile search ads, display advertising and video ads on YouTube, according to the Berg Insight report.

Apple is further seeking to gain market shares with the iAd platform. Facebook has moreover emerged as an important newcomer and is now generating half of its advertising revenues from mobile devices, it stated.

Several operators including AT&T, Orange, SFR and the UK joint venture Weve are also active in mobile marketing. Leading specialised mobile marketing players furthermore include Millennial Media, InMobi, Smaato, Nexage, Madvertise and Amobee, said the analyst firm.

The industry is in a phase of consolidation and notable transactions in 2013 include Millennial Media’s acquisition of Jumptap and Twitter’s acquisition of MoPub. Google has moreover acquired the crowdsourced navigation provider Waze which offers location-based advertising, it added.

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