More explosive growth for mobile advertising
It hit a record $3.4 billion last year, 9 percent of web dollars
April 17, 2013
This isn’t a particularly surprising revelation but it’s significant nonetheless: Mobile advertising is growing at an astonishing rate, underscoring a greater paradigm shift in internet usage from desktop to hand-held.
Half of all U.S. cell phone users have smartphones, nearly a third of Americans own tablets, and an increasing number of them rely on mobile as the only way to access the web.
More and more advertisers are trying to connect with these people, whom they could once reach via their desktops, via their mobiles, and it’s led to huge increases in mobile advertising.
Spending on the category spiked by 111 percent in 2012, to $3.4 billion, according to data released today by the Interactive Advertising Bureau.
That was up from $1.6 billion in 2011.
Mobile spending accounted for 9 percent of all online spending last year, a new high mark.
Those numbers include tablet advertising as well.
“Mobile soared due to its ubiquity and intrinsic ability to serve as a powerful digital dashboard that travels with you from morning commute to nighttime video viewing and beyond,” said IAB president and chief executive officer Randall Rothenberg in a call discussing the numbers with reporters.
For more than a decade, mobile has been touted as the next big thing in online advertising, but it was a slow build.
In the early 2000s, buyers experimented with text message advertising and ads delivered by Bluetooth technology.
It soon became clear that the most attractive about mobile advertising would be its ability to geotarget.
When you do a search for “best pizza parlor” on your phone, the joint across the street can instantly send you a coupon and invite you in.
This sort of advertising is much more appealing to businesses than basic search or display because you have a greater chance of getting your potential customer through the door when he’s standing right outside.
The forecast for mobile is bright for the coming years as well, as more and more local businesses integrate mobile into their budgets.
According to the latest forecast from BIA/Kelsey, an ad tracking firm in Chantilly, Va., local mobile advertising will grow to $9.1 billion by 2017, accounting for 6.1 percent of all local media revenue.
Mobile search will see particularly strong growth, to $5.7 billion by 2017.
So where is all this money coming from?
It’s likely a mix of two things, budgets being re-allocated from traditional to digital media and new, smaller advertisers entering the market.
The gigantic mobile growth came as part of another record year for online advertising. The IAB reports that total spending in 2012 grew to $36.6 billion, up 15 percent over 2011 and the best year ever for the medium.
During fourth quarter spending hit $10.3 billion, up 15 percent over the previous year and up 12 percent over third quarter of last year.
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