Mobile adspend to rise

23 April 2012

NEW YORK: Mobile advertising expenditure is set to almost double globally this year to reach more than $11bn, a forecast has predicted.

Strategy Analytics, the research firm, stated that total media revenues for this medium would hit $149.8bn in 2011, a 17% expansion measured against the previous 12 months.

Adspend levels are pegged to rise from $6.3bn to $11.6bn year on year, as brand owners increasingly turn their attention to this channel.

The majority of this figure, some $7.3bn, will be allocated to the mobile web, with apps and games collecting an additional $2.9bn, video tripling its returns to $726m and music platforms on $327m.

However, as display ads on the mobile web are only due to reach a value of $934.5m in Western Europe and the US, compared with $1.7bn for in-app ads, it appears the market is evolving fast.

David MacQueen, strategy Analytics' director of wireless redia strategies, said: "In the eyes of many advertisers, web browsing on the smartphone is playing second fiddle to the app economy."

Elsewhere, the report predicted consumer spending on content – such as browsing, music downloads and streaming, ringtones, broadcast material, video and games – should stand at $138.2bn in 2012.

This constitutes an improvement from $121.8bn in 2011, the first time the $100bn threshold had been crossed, and is a trend influenced by the rapid uptake of smartphones.

Within the expenditure total, mobile subscribers are expected to spend $82.8bn on data plans and web browsing this year, a 9.5% uptick on an annual basis, and a 60.2% share.

Apps are forecast to deliver 18.9% of sales, or $26.1bn. This marks a 30.7% increase in value terms. An estimated 32bn of these tools could be downloaded in 2012, up from 23bn in 2011.

Music should generate $16bn in expenditure, representing largely flat growth from 2011. But the balance in this category is moving away from ringtones and towards streaming services like Spotify.

Shopper spending on mobile video is also anticipated to yield $2.8bn this year. In all, 108bn pieces of such material were viewed on a handset in 2011, an amount set to come in at 280bn in 2012.

Finally, the overall revenues related to social networking content, apps and services is predicted to rise by 16.1% to $17.6bn, an 11.8% market share.

Data sourced from Strategy Analytics; additional content by Warc staff