In-app ad spend to reach $7B by 2015: study
July 5, 2012
An in-app rich media ad from Coca-Cola
Fueled by rich media and interactive ad units, in-application mobile advertising spend is expected to grow quickly, according to a new report from Juniper Research.
In Juniper Research’s “Mobile Advertising: Messaging, In-App and Mobile Internet Strategies 2012 – 2017,” the research company looked at different factors that are expected to spur mobile ad spend. Additionally, the study found that while certain brands are nailing mobile, there are still a surprising number of brands missing the mark in both apps and mobile sites.
“[The most surprising finding] for me was that despite enormous effort by some brands to embrace mobile and experiment with it, there are many brands who haven’t yet taken those steps,” said Charlotte Miller, research analyst at Juniper, Hampshire, Britain.
“There are so many brands that don’t have mobile-optimized Web sites – these brands are wasting a golden opportunity to access consumers,” she said.
Advertise on mobile
In addition to the 2015 prediction, the Juniper Research study projects that in-app mobile advertising spend will reach $10.4 billion by 2017, meaning that there will be a compound average growth rate of 34 percent from 2012 to 2017.
To compare, mobile app advertising is predicted to total $2.4 billion in 2012, per Juniper Research.
This growth will particularly be fueled in North America and western Europe, which will generate 85 percent of revenue.
Additionally, the far East and China will be a prominent area for app ad spend. Even though the area will continue to generate a significant amount of ad impressions, the average CPM is lower.
Each of these areas control approximately 30 percent of smartphone ownership, showing the proliferation of mobile devices in certain demographic areas.
“On the whole, mobile advertising both in-app and on the mobile Web will become much more rich,” Ms. Miller said.
“However, there are restrictions on what you can do with rich media in an app before it harms the users experience of the app. For example, someone playing a game may resent ads which distract from gameplay,” she said.
The report also outlines a few takeaways and best practices for brands in mobile.
For example, successful brands look at mobile from a 360-degree standpoint and how the channel integrates into all of a company’s marketing channels, such as television, display advertising and SMS.
Three main factors all feed into mobile advertising: trends, drivers and constraints. Trends include new technology that brands are experimenting with such as HTML5 or rich media, and drivers are broader positive implications such as growing smartphone ownerships and larger digital budgets. Constraints are factors such as privacy and fragmentation, which continue to hinder brands looking to roll out large-scale mobile campaigns.
Additionally, advertisers who use pull campaigns – meaning that a consumer has requested ad content – typically have higher response rates compared to push campaigns that aim to get consumers interested right off the bat.
According to Ms. Miller, mobile ads will begin to more closely resemble content in the future versus mobile ads that vie for consumers’ attentions. This will also include more specific ad targeting, although privacy will continue to be an issue.
“Marketers need to make sure that their ads are engaging enough to attract user attention without becoming intrusive,” Ms. Miller said.
“Entertaining ads that make the user want to click on them are essential since users spend so much time looking at content on their mobile devices – adverts on mobile need to be able to draw users in despite that,” she said.
Lauren Johnson is associate reporter on Mobile Marketer, New York
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