by Kunur Patel
Published:October 18,2010
NEW YORK (AdAge.com) -- Mobile is red hot this year, but it still won't be a billion-dollar ad business in the U.S. until 2011, according to new eMarketer estimates.
According to a new report, U.S. mobile advertising spending will reach $743 million this year, up a whopping 79% from $416 million the year prior. Mobile spending will cross the $1 billion mark in 2011 with sustained growth, though at slower rates.
Why has mobile seen such a rush in new ad money? Thank Apple.
"IAd has served as a tremendous catalyst in the industry," said eMarketer mobile analyst Noah Elkin of Apple's rich-media mobile ad unit, which launched this year at a high-profile press conference in Cupertino, Calif.
But it is Google and its recently acquired mobile-ad network, AdMob, that are projected to propel growth.
"Over time the combo of Google and AdMob has the potential to be equally, if not more, significant [than Apple] because of the scale Google brings the medium," Mr. Elkin said.
Last week, Google made a surprise announcement that it's on track to bring in $1 billion in global mobile ad revenue. The company did not break that reporting out by country, though revenue outside the U.S. is likely sizable, because it includes markets where mobile is more prevalent than desktops, such as India. Google's head of mobile ads, Omar Hamoui, the CEO of AdMob before the acquisition, told Ad Age in September about Google's plans to bring its sophistication in online ad serving and infrastructure to mobile.
SMS messaging is still the largest ad format in mobile, projected to hit $327 million this year. However, Apple's iAd, as well as Google's bet on mobile display through AdMob and its growing suite of rich-media units, will soon unseat text messaging as the primary mobile-ad medium. Mobile search and display ads are expected to pass messaging in 2012. Upticks in mobile search and display also coincides with growing smartphone penetration; Nielsen says there will be more internet-enabled phones than basic-feature phones in the U.S. at some point next year. Search and display also rely on faster and more pervasive mobile-internet connectivity.
Within mobile spending, video is the fastest growing ad medium, albeit from a tiny base, and will continue to be through 2014.
"Apple helped show the way with iAd. Obviously they weren't the first, but they are really good at getting the market excited," Mr. Elkin said. "All of that helps advertisers realize they can do a lot more branding on this medium. That's why you're going to see more dollars flowing into richer ad units over the next four to five years."
By jeffgreenhouse | Philadelphia, PA October 18, 2010 06:04:03 pm:
I wonder how they count ads served to iPads. Are they "mobile" ads? With more tablets and larger-format mobile devices (which may start consuming the same IAB units as desktop and laptop computers) the lines will continue to blur. I'm sure there will be debates about the methodology of measurement.
- Jeff Greenhouse
http://www.JeffGreenhouse.com
http://Twitter.com/JeffGreenhouse
By AllyLevin | Baltimore, MD October 18, 2010 06:55:40 pm:
Yes, mobile IS red hot, 100 percent. There are more than 1 billion people using mobile internet today. So I really don't understand why companies won't invest in quality mobile Web sites that you can actually use from your phone! Sites that are meant to be functional from on the go.
I found this link for a software that actually makes the mobile site for you, based on your existing site. Seems like a pretty cool idea - http://webtomobiles.com
By janestone | New York, NY October 19, 2010 10:36:33 am:
There's isn't any mention of the growth of tablets which will obviously play a major role in the significance of mobile advertising. Also, one may expect CPM's to go down as additional mobile devices penetrate the market and inventory becomes more widespread.
Jane Stone
VP Marketing
http://www.designpax.com
By JIM | ARLINGTON HEIGH, IL October 19, 2010 11:42:53 am:
I think it is interesting that cost per action advertising is left out of almost all mobile advertising discussions. While ad revenue may be increasing, the performance segment is skyrocketing in mobile. Instead of just serving an impression, CPA serves up engagement with measurable ROI from ad spend. Companies such as OfferMobi.com are forging a new frontier in mobile ads, tying spend to performance and results. Isn't that what buying ads is all about, measurable results? But no one wants to talk about the effectiveness of ads, only the wow factor.
At the end of the day, advertisers and agencies will be forced to include performance based ads, simply because the CPM rates for apps (which drives a significant portion of impressions industry-wide) are declining. This is pushing more app development companies to work with OfferMobi to serve up demographically matched campaigns that return higher eCPM's. As the app developers catch on, so will mobile site publishers as they see an additional bump in revenues from better targeting of the ads they place on their mobile sites.
Jim Lillig
VP Business Development
www.Offermobi.com
By RudyCCS | San Diego, CA October 19, 2010 02:25:39 pm:
I'm loving the creativity and more intimate brand connection available with mobile platforms. Smaller ad companies are building brands by emphasizing the importance of two-way conversation.
Check out www.textango.com to see a great example of an advertising revolution.
By DanaT3D | New York, NY October 19, 2010 06:02:09 pm:
We have had great success with text message marketing and are always looking for alternative ways to promote our brand and products. It is interesting how this industry is growing so rapidly.
There are a couple of interesting posts here that I am going to follow up on, but would like to know if anyone here has had personal experiences with them,
1. Offermobi
2. designpax-- I understand the value of mobile site, but why this company?
3. textango
By jchamberlin | Lakewood, CO October 20, 2010 11:04:19 am:
Mobile marketing in particular SMS Text campaigns create a conversation with consumers. With SMS Text campaigns marketers are able to re-engage consumers back to the brand.
By Robert | Wayne, PA October 22, 2010 01:24:10 pm:
Many people may look at the bottom chart and believe that mobile messaging is in decline. Quite the contrary. Text message marketing is the lone mature product of the mobile marketing bunch and will always be a lynchpin of your mobile efforts. While it may not be growing as quickly as video, for instance, the size of the pie is growing and therefore the size of the messaging pie is also growing.
Published by Ad Ops on the 25th Oct 2010
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