Mobile is now the world’s dominant computing experience. It is logical to assume that mobile will soon usurp the desktop as the dominant digital ad platform as well.
Despite its potential, legitimate questions surround the widespread assumption that ad spend will skyrocket to meet engagement.
In a recent report from BI Intelligence on the mobile advertising ecosystem, we give an overview of the mobile advertising industry’s size and explore the “monetization problem.” We also examine the mobile platform wars’ impact on advertising, as well as the potential industry split between smartphones and tablets.
Here’s a brief overview of the state of mobile advertising:
- The size of the market is small, but growing: U.S. mobile ad revenues were about $1.2 billion in 2011. This year, that same total was reached in just the first six months, IAB reports.
- Mobile advertising is way behind in terms of getting its fair share: In 2011, mobile accounted for 10 per cent of U.S. media consumption, but only 1 per cent of ad spend. And Google essentially accounted for 62 per cent of global mobile ad spend last year.
- The industry currently has somewhat of a monetization problem: The mobile ad industry does face important challenges as it works to close the gap with “eyeball time.” eCPMS are sometimes as low as 20% of their desktop counterparts. 40% of clicks are either fraudulent or accidental, and targeting has proven difficult due to developer attitudes and fragmented standards and protocols that enable relatively seamless ad delivery and measurement on PCs. And those are only a few of the reasons why.
- But, there is massive opportunity on the horizon: Two billion consumers will come online in the next three to five years, mainly in emerging markets. For many, their small screen will be their only exposure to online ads. Brands seem to be platform agnostic, advertisers are very excited about CTRs and the opportunity on tablets, and the industry is gradually streamlining and becoming more technically adept, which will lead to more brands jumping in. Innovation in areas like targeting and analytics is crucial.
In full, the report:
- Gives an overview of the mobile advertising industry’s size.
- Explores the “monetization problem,” in terms of both the challenges to revenue growth and the trends working in the industry’s favour.
- Examines the mobile platform wars’ impact on advertising, as well as the potential industry split between smartphones and tablets.
- Outlines what is being done, and what needs to be done, for the mobile advertising industry to grow more quickly
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