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December 13, 2012

Mobile Advertising to Reach $12.8 Billion in 2013

By Frank Griffin, TMCnet Contributing Writer

Smartphones and tablets are outselling PCs by double digit margins and mobile devices are becoming the choice for personal computing for a growing number of consumers and businesses. With hundreds of millions of these devices being used, it was only a matter of time before advertisers started marketing on this platform.

The Informa Telecoms & Media’s (News - Alert) research report “Mobile Advertising: Global Market Analysis and Forecasts 2011-2016” forecasts mobile advertising will reach $12.8 billion by 2013, a growth of almost five billion dollars from 2012. The report looks at the entire segment of the mobile device industry and analyzes the steps value-chain players, internet brands and mobile operators are taking to address the growth in the advertising market in the mobile arena including ad agencies and ad networks, advertisers and brands, mobile search providers, content publishers, app developers, mediation platforms, network optimizers, and mobile operators

While tablets are gaining ground, the vast majority of the mobile advertising will be geared towards smartphones. Revenues for mobile advertising are growing on a yearly basis, but brands don’t spend as much money as they do on PC/desktop and other channels. Analysts predict this will eventually change, but currently the analytics for mobile use don’t encourage companies to spend a big percentage of their marketing budget on the mobile platform.

“There is growing recognition of the importance of the mobile medium but when it comes to advertising, most brands and advertisers have not yet managed to effectively engage users and consistently achieve the desired returns with mobile advertising campaigns,” said Shailendra Pandey, senior analyst at Informa Telecoms & Media, in a statement.

The largest revenue generated from mobile advertising will be from display ads on mobile sites and mobile search on these devices. The biggest growth however will be from advertising in mobile apps. As more people use their apps instead of browsing on their smartphones any ad campaign will be geared towards the most popular apps used by the iPhone and Android (News - Alert) platforms. 

Mobile operators are an important part of this component, but they will not see a significant amount of revenue from this type of advertising. They will be able to generate large shares from other forms of mobile advertising such as messaging and voice-based mobile campaigns. Consumer response campaigns using SMS short codes and click-to-call functions are used regularly by internet-based campaigns, which rely on mobile operator for services.

Pandey continued, “Mobile operators should think of the possible benefits in the wider context with mobile advertising. They might not get direct revenues from mobile advertising but it can help them to develop and offer a more compelling suite of m-commerce services, increase subscriber loyalty and help to reduce churn on their networks.”

Mobile advertising accounted for only less than one percent of the money spent in advertising around the world in 2011. TV, print, radio and Internet ads have a considerable lead, but the rate in which mobile advertising is growing and other channels decreasing, it is only a matter of time before it start passing the other platforms.

Edited by Amanda Ciccatelli
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