Marketers significantly increased their spend on mobile in the first half, as budgets climbed 95 percent, according to a new report from the Interactive Advertising Bureau.

The IAB Internet Advertising Revenue Report found that the spend on mobile marketing reached $1.2 billion in the first half, up from $636 million in the comparable period in 2011. The rate of growth in mobile ad budgets significantly outpaced the growth rate for all other forms of digital advertising.

?Mobile is having a continuing and transformative effect on our culture, both with smartphones and tablets,? said Brennan Hayden, executive vice president and chief operating officer at Wireless Developer Agency, East Lansing, MI. ?Mobile is also the most important thing that has happened in advertising since television, and yes, it?s very attractive, and everyone is struggling to respond to the challenges and opportunities.

?I think the potential in mobile has been grasped for some time,? he said. ?The problem has been the challenges.

?What you are seeing now is that despite the daunting challenges facing the entire industry, all serious advertisers find themselves compelled to address them with decisive action.?

Mr. Hayden is not affiliated with IAB or PwC and spoke based on his experience in mobile.

IAB and PwC did not respond to press inquiries by the press deadline.

Smart move
In the second quarter, mobile revenues totaled 8 percent of total digital ad revenues, or $661 million. This number is up 92 percent from $344 million in the second quarter of 2011.

Part of what is driving the bigger spend is the growing penetration of smartphones and tablets. More money pouring into mobile advertising also points to the importance of location-based ads to advertisers.

A recent report from CTIA-The Wireless Association found that smartphones made up 41 percent of wireless subscriber connections as of June 2012 while tablets accounted for 17 percent of all wireless connections.

Additionally, CTIA found that mobile users are consuming more data via mobile devices, pointing to the growing opportunity to reach mobile users as they engage more frequently with their devices. CTIA found that more than 1.1 trillion MB of data was consumed by mobile users in the United States between July 2011 and June 2012, an increase of 104 percent over the previous 12-month period.

Marketing innovation
Overall, Internet ad revenues overall were up 14 percent for a total of $17 billion during the first half, according to the IAB/PwC report.

Key findings from the report include that the spend on digital video rose 18 percent during the first half for a total of a little over $1 billion, compared with $900 million during the same period last year.

Search revenue totaled $8.1 billion, up 19 percent while display related advertising totaled $5.6 billion, up four percent and accounting for 33 percent of all revenues for the first half.

By vertical, retail advertisers made up the largest category in Internet ad spending in the first half, spending a total of $3.4 billion and accounting for 20 percent of total revenues.

The automotive category brought in $2.2 billion for first-half, up 13 percent.

?The central issue is that there are too many new data sources from too many new vendors, with inadequate decision support systems, and so there is this temptation to leave mobile on the ?too hard pile? a little too long,? Mr. Hayden said.

?However, marketers and even CEOs know they need the data that comes from mobile usage, and they need it now,? he said. ?And the ecosystem needs the new vendors for their innovation.

?So you can?t really consolidate or standardize the fragmentation away, and you can?t wait out the problem. What we need is someone to invent a solution to the fundamental problem of managing the increasingly new, divergent and voluminous data streams. A solution to that problem could be the trim tab to turn the whole ship.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York