Mobile ads to take 11.7pc of digital ad spend

24 Nov 2009

The total value of the global mobile-marketing and advertising market will grow from €1 billion in 2008 at a compound annual growth rate (CAGR) of 43pc to €8.7 billion in 2014.

This is according to a report by analyst Berg Insight and comes just weeks after Google acquired AdMob for US$750 million in stock.

Once mobile advertising and marketing reaches the €8.7-billion threshold, this will then correspond to 11.7pc of the total digital advertising market. As the digital convergence blurs the differences between devices, the definition used for mobile advertising is that it is the digital media exposed on a mobile handset screen.

The report predicts that the mobile media will become a natural part of the marketing media mix.

Consumer interaction

“Handsets are highly private devices that offer a unique platform for personal interaction with consumers,” said Marcus Persson, telecom analyst, Berg Insight.

“Advertisers are increasingly aware of the opportunities and seek new ways to exploit them. Just the simple fact that people are able to make a phone call or send a text message anywhere at any time has changed the conditions for marketing in general.”

He added that many marketing campaigns are designed to trigger a response in the form of a voice call, SMS/MMS or a visit to a mobile website. On-screen advertising on mobile displays had not taken off until recently but is becoming increasingly relevant with the rising popularity of advanced internet-enabled smart phones.

Eye on increasing convergence

Berg Insight anticipates that there will be increasing convergence between traditional web and mobile advertising as the PC and mobile technological capabilities will come to merge.

The most likely result of such a development is the formation of a few dominant digital advertising networks spanning all types of devices. Corporations such as Google and Microsoft openly aspire for this position in competition with among others Apple, Nokia and Yahoo!.

Ultimately the control over advertising in handsets will reside far beyond the traditional mobile network environment.

By John Kennedy

Photo: Google has acquired AdMob for US$750 million in stock.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years