Mobile drives online ad growth

15 January 2013

NEW YORK: Online advertising is expected to account for a quarter of US adspend in 2013, according to new projections from investment bank JP Morgan.

Sector analyst Doug Anmuth forecast internet advertising will reach $43.5bn this year, representing a 17.4% increase on 2012 and 25% of total ad expenditure. He estimated that around half of that growth will come from investment in mobile web ads; without it, online ad spending would grow only about 10%.

"As consumer behaviour and time spent online rapidly shifts towards mobile, we expect advertising dollars to follow," he said.

Social media has also been a "key driver of brand advertiser spend due to its large reach and highly targetable user base", added Anmuth.

The figure tallies with Warc's November 2012 International Ad Forecast, which predicted a rise in the share of internet adspend in the US from 23.1% in 2012 to 25.1% in 2013.

Comparable figures for other markets stood at 36.9% in the UK, 31.9% in China, 25.3% in Germany, 18.7% in Japan, 15% in Brazil and 5.6% in India.

Separately, Deloitte, the consultancy, launched its 2013 media predictions report in which it predicted that mobile advertising will get split into two categories: tablets and smartphones.

Ed Shedd, lead media partner at Deloitte, suggested that "the new tablet advertising category should be worth about £2.1bn and the new smartphone category should be about £3bn".

Those figures, however, hide a major difference in advertising revenue. "In 2013, we estimate ad revenue per smartphone at about £1.55 and that for tablets at £7.90," said Shedd.

The progression of smartphone and tablet advertising is likely to be linked to the ability of these devices to generate e-commerce revenues, and Deloitte notes a significant gap in the range of content that is readily accessible via each.

It also suggests that the smartphone may drive initial discovery, while the tablet is used to gather more information before a transaction finally takes place via PC or in a shop.

Data sourced from MediaPost/Deloitte/Warc; additional content by Warc staff