According to Gartner, Inc, global mobile advertising spending is forecast to increase from an estimated $13.1 billion in 2013 to $18.0 billion in 2014. Further, the market is expected to grow to $41.9 billion by 2017.
Video advertising will witness the highest growth, followed by display advertising. Stephanie Baghdassarian, research director Gartner, says, “Over the next few years, growth in mobile advertising spending will slow due to advertising 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.”
Baghdassarian, adds, “However, from 2015 to 2017, growth will be driven by improved market conditions, such as provider consolidation, measurement standardisation and new targeting technologies, along with a sustained interest in the mobile medium from advertisers.”
Gartner states that amongst the different advertising formats used in the mobile sector, mobile display advertising formats will continue to be the single biggest category of advertising. However, in the long-run, mobile display advertising will shift to mobile web display with higher growth in in-application display. Uptake of the audio/video format by the end of the forecast period will also be higher because the tablet form factor will drive video, and the tablet market continues to grow.
The research firm states that there will be growth in the search/map-based advertising formats with increased usage of location data gathered from users, either through them opting into being located automatically through their devices or because they proactively check in the places they visit using applications such as Foursquare and Pinterest. As a result, local advertisers will be more interested in the mobile channel as a means of pushing advertising. The split between in-application and web display advertising is taking longer to shift in favour of the latter, as the use of HTML5 tools in mobile website development is taking longer to impact the market.
All global regions will experience strong growth in mobile advertising spend, although North America will drive the growth in the global advertising with large volumes and high advertising budgets.
According to Mike McGuire, research vice-president, Gartner, North America is the region with the strongest general advertising focus and investment. It is also the region where online advertising is most mature. Overall advertising budgets are the highest, so when a portion shifts to mobile, in a multiplatform approach, it immediately impacts the market’s scale.
Western Europe?s market for mobile advertising will remain similar to North America’s, at a slightly lower scale, for the duration of the forecast period. The mobile channel will become more and more integrated into 360-degree advertising campaigns, eating up budget historically allocated to print and radio advertising. Further, Gartner states that Asia Pacific and Japan is the most mature region for mobile advertising, and therefore growth in these markets will be slow between 2012 and 2017, averaging 30 per cent a year. Historically, the unusually high adoption of handsets for digital content consumption in Japan and South Korea has given the Asia Pacific region an early lead in mobile advertising. Looking forward, Gartner expects the high-growth economies of China and India to contribute increasingly to mobile advertising growth as their expanding middle classes present attractive markets for global and local brands.
In the emerging markets of Latin America, Eastern Europe, the Middle East and Africa, mobile advertising growth will largely track the technology adoption and stabilisation of emerging economies, but will mostly be driven by large markets such as Russia, Brazil and Mexico. From 2015, growth rates in this region will exceed the worldwide average.
