Research group eMarketer has released some very encouraging forecasts on the rate of mobile advertising spend over the next six months, with the UK and US pegged for significant year-on-year growth for 2012.
US riding high
The United States is set to see the biggest gains, according to eMarketer, and will overtake Japan to become the biggest market for mobile advertising by the end of 2012. Mobile advertising spend in the US totalled 1.2billion in 2011 and this is expect to reach to 2.2 billion year-on-year.
But the UK will be no slouch either. Mobile ad spend will almost double by the end of the year, from $327 million in 2011 to $558 million in 2012. By 2013 eMarketer estimates UK mobile ad spend to reach $892 million and $2.1 billion by 2015. The UK is set to be the third biggest market for mobile advertising, behind the US and Japan.
Global growth slower
Given its historical penetration of mobile data services Japan still sits at the top of the pile when it comes to mobile ads, with $1.3 billion in spend. But due to over saturation in the market, that figure is likely to increase to just $1.7 billion by the end of the year.
In terms of global growth, eMarketer expects total spend to reach $6.43 billion by the end of this year. The research takes into account display ad (i.e. banner ads, video, rich media ads) and excludes SMS and P2P advertising.
“The big underlying factor is that smartphone and Internet mobile usage are growing very quickly,” eMarketer’s Clark Fredricksen told Mobile Marketer. “This is opening up a lot of opportunities for advertisers.
“You also have a high concentration of big spending advertisers here, many of whom are already jumping into digital with big budgets so the switch to mobile is a natural progression,” he said. “The consolidation that is going on – Google bought AdMob, Apple bought Quattro – is contributing to them pushing the market forward very quickly.”
Tracking still a problem
eMarketer’s results are certainly very encouraging, showing healthy growth patterns. However, there’s a long way to go before the mobile ad industry reaches the same level as other advertising mediums. Mobile ads still only accounted for 1% of total advertising spend last year.
One of the biggest problems facing mobile ads, which has been dragging on for years now, is tracking and targeting. Unlike online desktop ads, it’s hard to assess the impact of a mobile ad campaign, because there’s still not an effective mobile replacement for cookies. Apple recently killed off UDIDs, which some advertisers were using to track devices, which was a big set-back for mobile ad companies.
Maybe more effective workarounds will fix this problem and instill more confidence in advertising departments. Or maybe the user expectation of extra privacy on mobile means advertisers have to suck it up. Either way, given the increasing dominance of smartphones in our daily lives, the importance of mobile ads for brands and businesses will continue to grow.