Mobile advertising revenue to double this year on back of improved ROI: Gartner
By Chantal Tode
June 17, 2011
Interactive mobile advertising is driving response
Mobile advertising revenue will more than double in 2011 for a total of $3.3 billion as marketers watch the returns on their efforts to engage consumers via mobile, according to a new report from Gartner.
The report, Forecast: Mobile Advertising, Worldwide, 2008-2015, forecasts that mobile advertising market will continue to grow quickly even beyond this year. The highest growth will be in in-app display and mobile video advertising.
The growth of smartphones and media tablets, by virtue of multi-touch touchscreen technology, has made mobile advertising more interactive and thus improved its ability to generate a response which is very important to advertisers, said Andrew Frank, research vice president at Gartner Inc., Stamford, CT.
The other factor [driving growth] is the growing use of tablets as media consumption devices for video and magazine-style content, which is driving publishers, broadcasters, and TV service providers to accelerate efforts to provide content for these devices, he said.
Gartner forecasts worldwide mobile advertising revenue will reach $20.6 billion by 2015.
The growth will be most pronounced in North America and Western Europe. Gartner expects North America will represent 28 percent of the global market by 2015 while Western Europe will account for 25 percent.
In North America, mobile advertising revenue will grow from $304.3 million in 2010 to $701.7 million in 2011. Looking further ahead, mobile advertising revenues in North America are expected to reach $5.8 billion by 2015.
Asia/Pacific and Japan will remain the leading market during this period. The region is expected to account for 49.2 percent of mobile advertising in 2011 and 33.6 percent in 2015.
Growth means that the market is becoming a reality, Gartner believes mobile advertising will start making an impact on advertisers that use it, said Stéphanie Baghdassarian, research director, Consumer Technologies and Markets, at Gartner.
Gartner expects budgets to increase as a result, with mobiles share growing from 0.5 percent to 4 percent of the total advertising revenue between 2010 and 2015.
The growth points to the need for marketers to not delay their trials in mobile advertising and put their budgets in place now.
Mobile search was the biggest category as of 2010, but growth is led by in-app and mobile video (though starting from a much smaller base) in the coming years, Ms. Baghdassarian said. By the end of the forecast period, mobile Web display growth will be higher than in-app display, thanks to html5.
Mobile display ads such as banner formats, rich media and interactive formats, will continue to be closely divided between in-app and mobile Web placements.
There are several areas where mobile advertising needs to continue to improve to continue driving this growth.
Gartner expects that targeting and contextualization, especially in social sites and applications, will improve throughout the forecast period and beyond.
One of the main issues that needs to be resolved is the standardization and enforcement of consistent opt-in methods for sharing information that respect privacy and give consumers control and transparency over how their data is being used, while also allowing advertisers to gain the benefits of targeting without risk of reprisals, Mr. Frank said.
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