Blog: Scale is the Next Big Step for Mobile Advertising

What a difference a year makes. eMarketer’s September 2009 mobile advertising report carried the optimistic subtitle “Change Is in the Air.” Well, it’s safe to say that in 2010, change happened, and mobile advertising ramped up at a quicker pace than predicted.

eMarketer now predicts $743.1 million in total mobile ad spending in 2010, a more than 25% increase over last year’s forecast. Our projections are up on the order of 25% to 35% per year through 2014.

In my new report, “Mobile Advertising and Marketing: Past the Tipping Point” (full version available here to Total Access clients only), I explore in detail the key factors behind this increase in spending. They include:

Major acquisitions of mobile ad networks by Google and AppleRising adoption of super-capable multimedia smartphonesThe launch of the iPad and the rapid revitalization of the tablet market

Cautious optimism about economic recovery can take some credit as well, but it is really the injection of a new dynamic in the mobile space that is prompting marketers to overcome their reluctance to embrace mobile as a channel to connect with consumers.

Much of this new dynamic is attributable to the high-profile (and high-dollar) acquisitions by Google and Apple and the ways both companies have sought to redefine the mobile device and advertising markets. Google’s promotion of Android has made it a powerful alternative to Apple’s popular iOS platform. And Apple, in turn, has countered with the launch of the iPad, a new iPhone and iAd, the company’s own advertising platform exclusive to Apple devices.

As I noted in a previous blog post, iAd has generated its share of controversy. But in a recent address at the iMedia Breakthrough Summit, I shared the results of nearly a dozen interviews I conducted with industry executives over the past two months. Everyone I spoke with, including some of Apple’s competitors, agreed that iAd has been hugely beneficial to mobile advertising.

Google’s acquisition of AdMob is no less significant, because it will help bring scale to mobile advertising. In the report I write:

Part of what has made Google so successful is the degree to which it has helped demystify and simplify the media buying process. If it can achieve a comparable result with mobile and provide an equivalent level of tools, reporting and accountability, the effect will be significant in both the number of advertisers it will be able to attract to mobile and the amount they spend.

The importance of scale should not be underestimated; it is vital for the long-term viability of mobile advertising.

There is more detail in the report, but the bottom line is this: with consumers spending an ever-increasing amount of time in front of their mobile devices, marketers can scarcely afford not to pay closer attention to mobile. To the contrary, brands need mobile more than ever to stay relevant. And with more capable devices, faster carrier networks, ubiquitous wireless broadband and the availability of richer ad units, marketers have more possibilities than ever to deliver immersive experiences.

This shift is already well under way on the desktop. Starting with the rich media ads proliferating today, the next five years will see more interactivity, higher-powered creative and yes, perhaps even more emotion in mobile advertising.

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