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Mobile ad spend undergoing fastest growth rates in US: IDC

With the number of mobile users of the Internet expected to outnumber PC users by 2015, mobile advertising is expected to grow significantly, reaching $28.8 billion in 2016, according to a new report from IDC.

The U.S. leads in the trend toward mobile Internet use and, a result, the shift in digital advertising will be most pronounced there. In the U.S. alone, mobile advertising spend is expected to reach $14.8 billion by 2016, up from $2.1 billion last year.

?The biggest news for mobile marketers is, however much you are spending on mobile marketing, you are spending it in the right place, and you should spend even more,? said Karsten Weide, program vice president of media and entertainment at IDC, Framingham, MA.

?Ten years out, mobile will be the default venue for digital marketing in the United States,? he said.

Digital advertising goes mobile
The U.S. mobile advertising spend will grow at a compound annual rate of 47 percent with mobile?s share of digital advertising climbing to 21 percent from six percent by 2016.

IDC forecasts that on a global basis mobile advertising will grow from $6 billion in 2011 to $28.8 billion in 2016, at a compound annual growth rate of 37 percent.

As a result, mobile?s share of digital advertising will grow from 6.8 percent to 17.8 percent, at the expense of traditional online advertising.

IDC also forecasts that worldwide business-to-consumer mcommerce will increase from $80 billion in 2011 to $554.7 billion in 2016, reflecting an annual compound growth rate of 47 percent.

Again the trend will be more pronounced in the U.S., with B2C mcommerce growing from $15.2 billion to $72.8 billion at a growth rate of 43 percent. The share of total B2C spending in the U.S. will grow from 6 percent to 18 percent.

Consumers abandon PCs
In the U.S., consumers have begun to abandon PCs as Internet access gravitates toward mobile devices as the default platform for Internet use. PC use is expected to top out in 2012, with the number of PC users declining in subsequent years.

At the same time, the number of mobile users will grow at a compound annual growth rate of 12.8 percent and will outnumber PC users by 2015.

Western Europe and Japan are about two years behind the U.S. when it comes to using mobile to access the Internet. The trend is being driven by the growing penetration of smartphones and media tablets.

The number of mobile users will grow from 174 million in 2011 to 265 million by 2016. The number of users who access the Internet exclusively through mobile devices will triple from 18 million to 55 million during this same period, reflecting an annual growth rate of 35 percent.

The numbers also suggest that PC?s share of many online activities will also decrease. For example, IDC forecasts that the share of users who access social networks such as Facebook on PCs will decline from 66 percent to 52 percent by 2016.

Other Internet activities expected to be affected by the growing use of mobile includes photo sharing, maps and direction and online shopping will decline from 74 percent to 68 percent.

The tablet effect
Last year, 68 percent of mobile advertising spending in the U.S. was for ads that appeared on mobile phones, 23 percent on media tablets and ereaders and 9 percent on other mobile devices such as the iPod touch.

However, IDC expects media tablets ? with consumer adoption growing quickly ? to have a 41 percent share of mobile advertising spend while 46 percent goes to smartphones and 14 percent to other devices.

While today, half of mobile ad spending goes toward browser-based ads and the other half toward app-based ads, IDC forecasts the app-based share will continue to grow and reach 58 percent share by 2016.

However, if there is massive HTML5 adoption among developers, this could increase the share of browser-based advertising.

?The U.S. is leading other countries when it comes to accessing the Internet via mobile because the synergy between digital media technology and social adoption of it is the most dynamic anywhere in the world,? Mr. Weide said. ?The fact that the U.S. are also one of the biggest homogeneous markets also helps.?

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