Soaring revenue figures underscore mobile?s importance as advertising tool: report
With a 215 percent year-over-year surge in Latin American mobile ad revenue growth leading the charge globally, worldwide mobile ad revenue rose to $19.3 billion last year from $10.1 billion in 2012.
?Mobile is becoming steadily more important worldwide as an essential part of marketers? toolkits,? said Joe Laszlo, senior director of the Mobile Marketing Center of Excellence at IAB. ?Naturally, mobile?s importance varies from region to region, but in North America and Europe and most of Asia-Pacific, mobile looks vital.
?In other regions like Latin America, the extremely rapid pace of growth suggests that marketers there, too, are fast embracing mobile.?
Regional growth
By region, North America accounted for 41.9 percent or $8.1 billion of the market, followed by Asia-Pacific, with 38.9 percent or $7.52 billion, Middle East and Africa, with 1.2 percent or $225 million, and Latin America, with 0.7 percent or $144 million.
Following Latin America in growth were North America with 122 percent,
Europe (90 percent), Asia-Pacific (69 percent) and Middle East and Africa (45percent).
Global surges of 123.4 percent in mobile display and 92.1 percent in mobile search were mainly driven by smartphone penetration as affordable data plans fueled location-based search-on-the-go, according to the report.
?The size of the mobile audience and its rate of usage of the mobile Internet are important drivers in mobile advertising?s growth,? Mr. Laszlo said. ?In markets with lower smartphone penetration rates, mobile advertising tends to be focused on messaging, less on search or display.
?And while messaging can be a great medium, it faces some inherent limitations in richness and interactivity that put an upper limit on its growth.?
The ad-supported Internet on personal computers took off when PCs and modems got faster, and ISP services went flat-rate or free. A similar evolution of phones and mobile data plans is helping grow the mobile Internet, Mr. Laszlo said.
Messaging revenue rose 19.4 percent globally, suggesting the channel might not be sharing as much robust growth due to migration from operator-owned SMS and MMS messaging services to alternative platforms.
Search represented $9.5 billion, or 48.9 percent, of total 2013 global mobile ad revenue. Display captured $8 billion, or a 41.5 percent share. Messaging took $1.9 billion for a 9.6 percent share.
The growth in mobile display and mobile search reflects marketers jumping on easy-to-execute mobile strategies.
Mobile offer at Gap.com
?Mobile display and mobile search are extensions of online advertising so they?re easy to execute,? said Alex Campbell, co-founder and chief information officer with Chicago-based Vibes. ?Display, as it?s defined for online, is not the best way to use mobile for marketing purposes. It just doesn?t generate the engagement needed for success in mobile. Search on the other hand is extremely influential in mobile.?
The results make it clear that mobile has to be a part of the marketing mix, as marketers continue uncovering how customers use mobile in their unique shopping experience.
?Just running display ads might be ok for one customer type but it?s certainly not going to be enough to cover all of your customers who are influenced by mobile marketing,? Mr. Campbell said.
Early days
Marketers still have a long way to go before they feel confident replacing engrained desktop-based marketing principles with new creative, tactical and strategic opportunities.
?Many marketers around the world are embracing mobile as a unique medium ? and the growth in the IAB ad revenue numbers certainly reflects that,? said IAB?s Mr. Laszlo.
?But there are also still many marketers and agencies that are just dipping their toes in the mobile waters, and so there?s still a real need for IAB and other industry efforts to explain to marketers why shifts in strategy and tactics, as well as creative, are needed to fully take advantage of what mobile can do.?
Final Take
Michael Barris is staff reporter with Mobile Marketer, New York.