Mobile Ad Market Spending To Hit $18BN In 2014, Rising To ~$42BN By 2017, Says Gartner

Next Story

Verizon Ramps Up In TV, Buys Troubled OnCue And The Rest Of Intel Media From Intel

In a new report on the mobile ad market, analyst Gartner is projecting a slowing in the growth rate over the next three years, owing to mobile ad inventory outpacing demand.

But despite supply temporarily bubbling up to overtake demand — as the number of mobile websites and apps proliferate faster than brands request ad space on the small screen — it still expects advertisers to show what it describes as “sustained interest” in the medium over the coming years. And the size of the market to swell considerably.

Gartner said it expects global mobile advertising spending to reach $18 billion this year, up from the estimated $13.1 billion in 2013. By 2017 it’s projecting the market will have sized up to be worth $41.9 billion.

From 2015 to 2017 Gartner said growth will be fuelled by “improved market conditions” — citing provider consolidation, measurement standardisation and new targeting technologies as likely areas helping to underpin and bolster the market. 

All global regions will experience “strong growth”, according to the analyst, although North American is projected to take the lion’s share of growth — owing to the very large scale of ad budgets in the region and their shift to mobile. It is also, after Japan/Asia Pac, the region where mobile advertising is most mature.

In terms of mobile ad types, video will show the highest growth — with the category being driven by tablets and growth in tablet ownership — but display formats are expected to make up the most revenue.

Gartner added that it expects the display category to shift to mobile web display after several years of higher growth in in-app display.  Although it added that this shift is taking longer than expected, owing to the use of HTML5 tools in mobile website development “taking longer to impact the market”.

Other mobile ads types that are expected to get a boost during the forecast period include search/map ad types — which Gartner expects to benefit from increased use of location data gathered from mobile users opting in to location services or proactively checking in to the places they visit via their use of apps such as Foursquare and Pinterest. It said this in turn will drive local advertisers to become more interested in the mobile channel.  

Turning to other regions, Western Europe is forecast to see a slightly lower scale in mobile advertising than North America over the period, but Gartner said it broadly expects a similar performance. And to see the channel becoming “more and more” integrated into 360-degree ad campaigns — taking budget from print and radio.

In Asia Pac and Japan mobile ad spending growth will slow between 2012 and 2017, averaging 30% per year, as a natural consequence of the region’s early lead in mobile advertising — itself fuelled by early adoption of smartphones in Japan and South Korea.

Going forward, the high-growth economies of China and India are expected to contribute increasingly to mobile ad growth in Asia — with local and global brands keen to target their expanding middle classes.

In the emerging markets of Latin America, Eastern Europe, the Middle East and Africa, Gartner said mobile advertising will grow most in large markets such as Russia, Brazil and Mexico. From 2015, it expects growth rates in this region to exceed the worldwide average, as smartphone adoption continues to grow.