Mobile adspend to surge

15 October 2012

NEW YORK: Mobile adspend is set to surpass $20bn globally in three years' time, partly due to the rising usage of social networks and location-based tools via this channel, according to Gartner.

A study published by the research firm predicted mobile ad expenditure should register a twelve-fold expansion worldwide, and reach $20.6bn by 2015, equivalent to about 4% of the entire ad market.

"Aided by a recovery in overall ad spending, the mobile advertising category has accelerated its evolution during the past year, despite lingering issues, such as privacy, metrics and standards," said Mike McGuire, research vice president at Gartner.

"This growth is being driven by robust adoption of smartphones and media tablets, and their increasing use as all-purpose information, entertainment and social networking devices."

Location-based services are also in line to see a surge in revenues. Schemes engaging shoppers in this way will be worth $13.5bn in 2015, of which ads are anticipated to be "the dominant contributor".

By the end of 2012, an estimated 800m people should be utilising these tools, with social networks, search engines, news providers and entertainment services the firms primarily tapping this trend.

"Applications that will generate the highest interest in the near term will be navigation, location search and friend finder/social networks," Gartner said.

In a concomitant shift, one billion consumers will log on to social networks like Facebook and Twitter through their phones in 2014, a shift equating to "mainstream adoption" of this activity.

Gartner's previous survey data has suggested that 15% of mobile subscribers generally engage in this pastime, and it predicted "five or fewer players" in the sector will dominate by 2015.

One of the channels the study recommended using, mobile app stores, should offer good distribution and large numbers of developers, alongside providing user reviews and ad services, it added.

Bar code marketing, where consumers scan images to find out information, is forecast to reach the mainstream in two-to-five years. This range stood at five to ten years for augmented reality.

Many smartphone owners have also displayed a "growing willingness" to use mobile coupons. While "adoption has been slow" among firms to date, early movers in this area may thus acquire an advantage.

Data sourced from Gartner; additional content by Warc staff