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Smartwatch advertising spend to reach $69m by 2019: report

Marketers? advertising spend on smartwatches is expected to reach a total of $68.6 million in four years as the wearables sector becomes permeated by top technology brands such as Apple, as well as more fashion-friendly retail brands, according a report from Juniper Research.

Consumers? excitement about the rise of wearables will certainly contribute to this projected amount, which is significantly increased from this year?s estimate of $1.5 million. Brands and marketers will need to create compelling new advertising formats to successfully see return on investment, due to the narrow time frame that these mobile devices offer for grabbing user interest.

?On a smartwatch, there is very limited time for any advertisement to be displayed on the screen and to engage the user,? said James Moar, research analyst at Juniper Research, Basingstoke, Hampshire, Britain. ?This means that advertisements on a smartwatch need to have an instant impact on the user.

?However, this could be extremely difficult on a small screen, so brands and advertisers would need to formulate a creative and compelling experience for the users.?

More engaging methods
The time for banner ads has come to an end, instead paving the way for more engaging forms of advertising such as interactive social media posts, programmatic and mobile video. Video may offer the greatest potential for marketers who seek to advertise on wearables, as short clips of several seconds each will likely capture users? attention as they glance at their wrists.

Consumers have also been proven to retain more information from video advertising, thanks to the combination of visual and audio means.

There is also large opportunity to advertise on fashion brands? smartwatches, as those devices may offer more visual features. Kenneth Cole hopes to grab some of the excitement around wearables for itself by rolling out a smartwatch collection that arrives in twelve styles and enables users to take selfies, suggesting that more fashion brands will begin to permeate the wearables space (see story).

However, those marketers must ensure that their devices are just as technology-savvy as they are fashion-friendly, which prompts them to turn to a vendor for expertise.

?We expect fashion brands to show some interest in the wearables sector, although their lack of expertise regarding the technology will necessitate that they take a partner for their devices, either a vendor or a third party consultancy company,? Mr. Moar said.

Limited real estate
Perhaps the biggest challenges for advertisers will be the limited real estate that wearable screens offer, as well as the need to market to consumers in several seconds or less. Consumers? usage behaviors will vary extensively from those of smartphones, as mobile users typically spend several minutes at a time on their smartphones or tablets.

Juniper posits that most ad spend will likely come from ad hoc campaigns, until a user base is established. A large portion of advertising spend is set to come from the Far East region, with North America taking second place.

?Apple consumers are very brand loyal, and the more closed off nature of the iOS system limits their options in comparison to an Android user,? Mr. Moar said. ?Both of these will dampen the ability of consumers to move beyond the Apple Watch itself, although the existence of Pebble shows that there is room for cross-platform watches.

?However, without the brand appeal and connections of a vendor like Apple, such watches won?t grab consumers? attention in the same way.?

Final Take
Alex Samuely is an editorial assistant on Mobile Marketer, New York