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Bigger mobile ad budgets, more device use expected

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Growth rate slows for mobile ad budgets

The coming year promises to be even better than 2013 was to mobile marketers, with a pair of new reports pointing to bigger budgets and more opportunities to reach mobile users coming down the pike.

While advertisers’ spend on mobile does not currently match up with the amount of time consumers spend with their devices, this could soon change as mobile ad budgets begin to catch up and account for 19.3 percent of the global online ad spend or 5.9 percent of the total spend, according to a new report from Berg Insight. At the same time, mobile Internet traffic surged this year, per wireless carrier consultant Chetan Sharma.

“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, in a statement.

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“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,” he said.

Ad spend correction
The global mobile marketing and advertising market is expected to grow at a compound annual growth rate of 26 percent over the next years to reach $38.1 billion in 2018, up from $9.4 billion in 2012, per the Berg Insight report. On a global level, mobile search is forecast to have the largest share of the total mobile ad spend – at more than 50 percent – followed by display advertising and messaging.

Currently, traditional media channels such as print and television receive a greater share of the total ad spend even though the amount of time consumers spend consuming content in these channels continues to decline. At the same time, mobile is receiving too little investment when the amount of time consumers spend here is considered.

However, Berg Insight expects that a correction in the ad budget spent on different media is imminent, which would pave the way for the significant increase in mobile ad spend the company predicts in the coming years.

Mobile data
Pointing to how mobile is becoming a favorite channel for media consumption, consumer demand for mobile data continues to grow, with some Android devices consuming over 4GB per month on average, per Mr. Sharma.

The significant growth in LTE is helping to enable data-hungry consumers get their frill, with over 250 networks launched and the United States leading with all major operators having substantial LTE deployments.

At the same time, Wi-Fi’s importance grew in 2013, with 60 percent to 70 percent of mobile data traffic being carried by Wi-Fi networks in most countries.

“The total number of mobile subscriptions got tantalizing close to the number of humans on the planet,” Mr. Sharma said, in a statement. “Next year, we will go past the milestone but it shows the pervasiveness and strength of the mobile technology that it has become the basic part of our Maslow’s hierarchy.”

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

Associate Editor Chantal Tode covers advertising, messaging, legal/privacy and database/CRM. Reach her at chantal@mobilemarketer.com.

Related content: Research, mobile advertising, mobile data, Berg Insight, Chetan Sharma, mobile marketing, mobile

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Comments on "Bigger mobile ad budgets, more device use expected"

  1. Drew Butler says:

    January 20, 2014 at 11:10am

    Thanks for the great article!

    I've been increasing the mobile ad spend for my clients recently for search ads, particularly because I know the importance of landing above the organic results on the first page. Most mobile browsers only show two ads here, so the competition can be high.

    It seems, though, that certain clients may not benefit as much from mobile traffic. Obviously, businesses that want to encourage calls would benefit, but businesses with a complicated online conversion page may not want to spend so much on mobile ads. Do you have any suggestions for how to deal with this and drive cross-device conversions?
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