U.S. Mobile Ad Revenue to Grow Significantly through 2013

  |  February 25, 2009   |  Comments

Local search is expected to account for a large portion of growth for mobile advertising over the next few years.

The U.S. mobile advertising sector is likely to continue to grow as adoption of mobile handsets, particularly smartphones, rises. That's according to "Going Mobile: The Mobile Local Media Opportunity," a report released by The Kelsey Group's new mobile local media practice, which includes forecasts for local mobile advertising through 2013.

Advertising revenues for U.S. mobile are expected to grow from $160 million in 2008 to $3.1 billion in 2013, a compound annual growth rate (CAGR) (define) of 81.2 percent. The ad spend for the mobile category is divided in three categories. In 2008 the split was $21 million on display advertising, $39 million on search, and $100 million on SMS (define). By 2013 a shift will occur with a bulk of the spending dedicated to search. The report projects $567 million will be spent on mobile display ads, $2.3 billion on search, and $270 million in SMS.

Tightening budgets have affected mobile expenditures. Many still in the experimental phase have been slashed and won't recover for the next year or two. "Basically, we're not really going to see a tipping point in terms of mainstream advertiser adoption until 2010 or 2011," The Kelsey Group's senior analyst and program director Michael Boland told ClickZ News. "Mobile is still something seen by a lot of advertisers as experimental. In uncertain economic times experimental will go down."

As mobile penetration grows, and mobile Web usage continues to grow, advertisers are expected to follow users to the channel. "We expect mobile penetration to continue growing, despite all of that it is still relatively low, and not enough to attract advertisers yet," said Boland.

Mobile does offer promise for local, particularly for local advertisers, suggested Boland. "It's closer to the point of purchase in the store, it opens up opportunities to data feeds, product price, and the ability to do shopping and not having to do all the planning before you leave the house," Boland said.

Two factors will ease the adoption of mobile Web usage and ability for advertisers to reach consumers on a mobile device. The increase of app stores from Apple and other providers makes compelling content for a variety of handsets ubiquitous. Google, on the other hand, makes it easy for small businesses to advertise. "Google's already started to lower the barrier with Google Mobile, the addition of Google AdWords to mobile," Boland said. "[Advertisers] hit a few extra buttons to advertise on the iPhone and [Google] Android devices.... That will be the one thing to drive adoption once Google makes it easier for small businesses to buy mobile marketing."

ClickZ Live New York Want to learn more? Join us at ClickZ Live New York 2015
[ALERT] Super Saver Rates Expire January 30. With over 15 years of experience delivering industry leading events, ClickZ Live brings together over 50 expert speakers to deliver an action-packed, educationally-focused agenda covering all aspects of digital marketing. Quick! - Register today to secure your place at the best rate.

ABOUT THE AUTHOR

Enid Burns

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

Jobs

    • Sales Planner
      Sales Planner (Verve) - Los AngelesJob Information:   Planners at Verve are responsible for supporting all of the ad sales team’s pre...
    • E-Commerce Marketing Associate
      E-Commerce Marketing Associate (OmniVista Health) - BaltimoreOmniVista Health is looking to add an E-Commerce Marketing Associate to our expanding...
    • Front End Web Developer
      Front End Web Developer (Agora Financial) - BaltimoreAgora Financial, an independent financial publisher, has an immediate opening for a Front-End...