Mobile ad spend to reach $40bn globally within five years

By Rosie Baker | 23 October 2013

Mobile ad spend is set to reach US$40bn in the next five years. It currently sits at around US$13bn globally but could rapidly triple as social platforms become increasingly mobile and money focused, as trading platforms continue to penetrate and as advertisers catch up to where the eyeballs are.

The report, by Juniper Research, says the surge in analytics platforms, innovative ad formats and purchasing mechanisms such as real-time bidding (RTB) will drive massive spend in mobile. Specific data for Australia wasn't published, but a recent ZenithOptimedia report earlier this month, claimed mobile ad growth in Australia would be half the global growth rate this year, suggesting Aussie marketers are lagging despite the region having amongst the highest smartphone penetration globally. Take note – there's big money to be made.

The Mobile Advertising: In-App, Mobile Internet & Messaging Strategies 2013-2018 report, did however warn that many brands are still wary of mobile advertising, and revenue is disproportionately low compared with the levels of engagement on mobile. Caution comes from concerns that mobile ads could be perceived as “intrusive” and “inappropriate” by consumers, according to the report.

Better targeting and different styles of advertising can allay that though. Sian Rowlands, the report author, said: “We are witnessing a change in consumer perceptions of mobile advertising as advertisers begin to use opt-in, or reward-style advertising, by harnessing big data and location information, mobile ads are being better targeted to users.”

The report cited Facebook's success over the last year in monetising its mobile applications as an example of the leaps forward in mobile in recent months.

Mobile now contributes 41% of Facebook's ad revenue. A year ago it was negligible and Facebook CEO Mark Zuckerberg made monetising mobile the social network's priority. In its second quarter this year, Facebook earned US$651m from mobile ad revenue.

The social network introduced video within native apps on the platform yesterday as well as a cost-per-action bidding model to help app developers and advertisers drive uptake of their Facebook apps. Video ads are also expected to launch on the platform within the next few months.

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