Mobile ad spending to hit $40bn by 2018

smartphones-genericA three-fold jump in mobile ad spend over the next five years has been predicted by Juniper Research, up from 2013’s $13bn to in the region of $40bn per year.

All the usual suspects are cited as reasons for this growth, including better use of analytics and more innovative ad formats.

But the report highlights the disproportionately low levels of ad spend on mobile – the one device most people keep with them, or close to them, all day every day.

A historical lack of effectiveness on the part of mobile advertising may have held back any appetite to invest heavily and can be attributed to imprecise monitoring and measuring, according to Juniper. As the means to measure the ends improves, so spending on mobile advertising will become more of a science and less of an art – leading to an increase.

Sian Rowlands, a research analyst at Juniper, the author of the Mobile Advertising Report, explained: When a person is carrying out a task on their mobile device, they are often focussed solely on that task, whereas we see for people who watch TV, they are often multi-tasking, or on their phone at the same time. Furthermore, viewing on mobile devices and tablets is increasingly replacing TV viewing. Due to these factors, we would say that mobile is seeing a disproportionately low ad spend versus TV, and other formats.

By comparison with the $13bn spent on mobile advertising this year, TV annual ad spends are estimated to be between $150bn and $300bn.

“I would say this low mobile ad spend is attributable to the fact that mobile adverts have been, in some instances, quite ineffective,” Rowlands continued. “However, as we move towards a time when targeting capabilities and purchasing mechanisms improve, I believe we’ll see mobile advertising reach its full potential.”

Other Key Findings from the Report Include:

  • The fastest growing region, in terms of mobile ad spend, will be the Indian Subcontinent. Spend here will increase four times from 2013 to 2018.
  • Advertisers can increase conversions by simply adding mobile optimised features, for instance a ‘click to call’ button, or by linking to the correct app store.

The “Mobile Advertising – It All Ads Up” whitepaper is available to download from the Juniper website.