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Mobile advertising spend to rise 80 percent in 2010: Study

Mobile advertising study

Mobile advertising is going to break out in 2010, with average spend increasing 80 percent, but some publishers are struggling to participate in the boom, according to Mojiva.

In a recent survey conducted by DM2Pro.com and Mojiva, nearly 1,000 agencies, brand advertisers and publishers chimed in. The survey projected a significant hike in mobile ad spending.

“Agencies polled represented that the average individual client spending would see an 80 percent increase,” said Melinda Gipson, publisher of DM2PRO.com, Royaton, CT. “On average across their business, they see a ramp up of 65 percent and for brands, the prediction is that spending will more than double

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“What's surprising about this is the consistency of responses here,” she said. “When you take out the agencies that are staying level or decreasing their spending by 1 percent, only 6 percent of respondents are decreasing their mobile spending.

“When's the last time you saw 94 percent agreement in the ad agency world on anything?”

Mojiva is a mobile advertising platform for advertisers and publishers who want to get into the smartphone market.

DM2PRO.com is a membership site for digital media and marketing professionals who want data, case studies and information on mobile media.

Mobile future
According to several agencies, client spending was pegged at $143,000 on average last year and $260,000 this year, which represents an 80 percent increase in spending.

Additionally, agencies predicted that its client spending would increase by 65 percent for 2010.

Brands predict that mobile advertising spending will double, from an average budget of $269,000 in 2009 to $679,744 in 2010.

In addition, more than 67 percent of publishers sell mobile separately, but for an overlapping 65 percent, mobile can either be bundled or included as a value-add in other media sales.

Only 24 percent of mobile publishers sell out more than half their inventory.

“There's a rapid influx of newbies into mobile marketing,” Ms. Gipson said. “Their spending is still quite small.

“This is to be expected, but when you look at the more tenured marketers – those spending six figures already, and the much larger increases they're forecasting, you'd have to conclude that, once you crack the code on mobile, the ROI must be phenomenal to justify that level of increases that marketers are projecting here,” she said.

“Even those who haven’t done mobile marketing at all look to be putting 10 percent of their total spend into the category. This seems like a large leap to take – sort of like going from 0 to 60 in 10 seconds.

Advertising strategy
According to DM2Pro.com, many brands have not done mobile marketing because they claim they need a better strategy.

The company claims that the data it collected from respondents should be helpful to businesses in making the right strategic decisions.

“With all this money headed into mobile marketing, many publishers still have difficulty capitalizing on this influx,” Ms. Gipson said. “It sounds self serving, but clearly, those who do, seem to be those that effectively use mobile ad networks.

“For example, publishers who use mobile ad networks say they account for more than 60 percent of revenue,” she said. “2010 is the year mobile breaks out of single digits for brand and agency marketers.

“Total overall mobile spending is small, but will begin to represent a growing subcategory of online spending for most, and a key, dedicated channel for many others who've already found it successful.”

Associate Editor Rimma Kats covers media, television, research and social networks. Reach her at rimma@mobilemarketer.com.

 
Related content: Advertising agencies, mobile advertising, Mojiva, DM2Pro.com, survey, Melinda Gipson, mobile marketing, mobile

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