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Mobile advertising market to increase at a CAGR of 43%

Industry Sector

Telecommunications

Published

13 November 2012

Author

Mike King

Type of News

Market

The mobile advertising market was valued at a global figure of $5.3 billion (€3.8 billion) in 2011, with regional shares being accounted for by: Europe 25.9%; North America 31.4%; Latin America 3.5%; Asia-Pacific 35.9%; Middle East & Africa 3.2%.

As mobile phones outnumber TV sets by over 3 to 1, and PC based internet users by over 4 to 1, and the total laptop and desktop PC population by nearly 5 to 1, advertisers in many markets have recently rushed to this media. In Spain 75% of mobile phone owners receive ads, in France 62% and in Japan 54%. More remarkably as mobile advertising matures, like in the most advanced markets, the user involvement also matures. In Japan today, already 44% of mobile phone owners click on ads they receive on their phones.

Key factors driving growth within the mobile advertising market include a dramatic increase in smartphone usage, over-the-top applications, introduction of new methods such as abbreviated dial codes, and many other factors. Worldwide share of mobile web traffic alone has increased from 3.8% to 10% from 2010 to 2012. Mobile Internet usage is expected to overtake desktop usage as early as 2014.

In 2010, an Apple Inc. co-founder proclaimed, "Mobile advertising really sucks." Now, however, the rule book for what works in mobile advertising is slowly being re-written.

Some of the ingredients to success include ads that play on the unique properties of mobile gadgets, including location, or ads disguised as a game, coupon or information that consumers want, say ad executives and industry observers.

In some markets, this type of advertising is most commonly seen as a Mobile Web Banner (top of page) or Mobile Web Poster (bottom of page banner), while in others, it is dominated by SMS advertising (which has been estimated at over 90% of mobile marketing revenue worldwide). Other forms include MMS advertising, advertising within mobile games and mobile videos, during mobile TV receipt, full-screen interstitials, which appear while a requested item of mobile content or mobile web page is loading up, and audio advertisements.

As users move to mobile faster than marketers, mobile ad prices are being pushed down. While rates vary widely, on average it costs $2.85 to reach 1,000 iPhone users with a mobile ad. By comparison, an ad in a national newspaper can cost as much as $50 or $100 for 1,000 viewers, a standard ad-rate metric.

Looking ahead, the mobile advertising market has been forecast to increase at a compound annual growth rate (CAGR) 43% to 2014, to reach a market value of €8.7 billion.

For more information on the mobile advertising market, see the latest research: Mobile Advertising Market

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