The mobile channel is set to play an even bigger part in companies’ promotional strategies this year, new estimates suggest.
According to a report by Gartner, $13.1 billion (£8 billion) was spent on mobile advertising around the world during 2013. However, the organisation expects this figure to increase to $18 billion in 2014.
This upturn is then set to continue in subsequent years, with Gartner predicting that mobile advertising spend could eventually reach $41.9 billion by 2017.
Stephanie Baghdassarian, research director at Gartner, commented: “The mobile channel will become more and more integrated into 360-degree advertising campaigns, eating up budget historically allocated to print and radio advertising.”
She stated that growth in the market between 2015 and 2017 is likely to be fuelled by a number of factors, such as improvements in the operating environment, the emergence of new technologies and provider consolidation.
Ms Baghdassarian said this will be complemented by a “sustained interest” in the mobile channel among advertisers around the world.
However, she stated that growth in mobile advertising spend will eventually start to slow down in the next few years.
This, she said, will be “due to ad space inventory supply growing faster than demand, as the number of mobile websites and applications increases faster than brands request ad space on mobile device screens”.
Gartner is expecting mobile advertising spend to go up in every region of the world in the near future, with the strongest increase taking place in North America.
Mike McGuire, research vice president at Gartner, said this is because it already has the greatest “general advertising focus and investment”, as well as a mature online advertising market.
However, he said the market for mobile advertising in western Europe is likely to “remain similar to North America’s, albeit at a slightly lower scale” throughout the next few years.
The Asia/Pacific and Japan area was identified as the most mature mobile advertising market in the world, which means it is set to see a relatively slow increase in spending in the near future, when compared with other regions. Meanwhile, growth rates are expected to be higher than the global average in countries such as Mexico, Brazil and Russia.
Gartner’s report went on to note that mobile display ad formats are likely to remain the largest category of ads throughout the coming years. However, their share of the market looks set to be dented by the growth of mobile web display ads.
In addition, spending on audio and video formats has been tipped to pick up gradually due to changes in the devices consumers are using, since more and more people are turning to tablets.
The report added that a growing number of mobile device users are making a point of checking into the places they are visiting or allowing themselves to be located automatically. Gartner believes this could lead to an increase in search/map ad types, so people can see promotional material directly related to their current location.
Posted by Robin McCrink