Study: Mobile ads to exceed 30% market share in 2020
- Mobile advertising will grow to nearly 31% of global expenditure by 2020 from 19% last year, and will overtake broadcast television by 2021, according to a forecast by Zenith shared with Mobile Marketer. Mobile ad spending’s growth rate will drop to 21% a year until 2020 from 35% in 2017.
- The tipping point for mobile dominance is 2021, given the projected trends for the next two years. Mobile’s growth rate will lead to $187 billion of ad expenditures in 2020, more than twice the $88 billion spent on desktop ads and closer to the $192 billion forecast for TV.
- Meanwhile, television ads are most effective at driving recall among potential customers, while mobile ads are the least. Potential customers are 53% as likely to recall television ads as existing customers, but the percentage is only 41% for mobile ads, per Zenith.
Zenith’s estimates of ad spending show the ongoing strength of mobile platforms as audiences shift their viewing habits to smartphones that have bigger screens and greater capacity to handle streaming video. Mobile ad spend will outpace the global rate, which Zenith forecasts will increase 4.5% this year, in line with worldwide economic growth. That projection is less than the 4.6% growth forecast in March, a reflection of a stronger 2017.
Brands that shift budgets to mobile ads, however, may be affecting their ability to win new customers and expand their market share, the media agency said, given the difficulty of ad recall on mobile platforms. Traditional mass media are more effective at driving recall among new or light buyers of products, which means brands need to develop a strong understanding of customer acquisition and retention channels. Because mobile is currently less effective at creating long-term awareness among potential customers than traditional media, brands with a heavy mobile presence need to consider spending more money on traditional mass media to boost awareness. BarkBox, for example, recently announced its move to slash its Facebook ad budget in favor of traditional media.
The media agency's forecast confirms the findings of other studies, especially as mobile video becomes more predominant. Forrester forecast that mobile will account for 72% of the growth in spending on online video advertising, while its share of the online video ad market will grow from 50% this year to 59% by 2023. Smartphone users are becoming more comfortable with viewing online video as the share of mobile screens that measure at least 4.5 inches increases.