Mobile Ad Spending to Reach $18 Billion in 2014: Gartner
Global mobile advertising spending is forecast to reach $18 billion in 2014, and the market is expected to grow to $41.9 billion by 2017, according to a report from IT research firm Gartner.
Uptake of the audio and video format by the end of the forecast period is higher thanks to the tablet form factor, which is expected to drive video, while the tablet market continues to grow.
While display ads are expected to provide the majority of revenue, mobile video advertising will be the key growth driver, according to the report.
With a growing number of location-based apps hitting the market and a growing volume of location-based information available, Gartner analysts predict local advertisers will be more interested in the mobile channel as a means of pushing ads.
The popularity of applications such as Pinterest and Foursquare, which allow users to "check-in" to a certain location, is also expected to add to mobile advertising growth, although the report noted the split between in-app and Web display is taking longer to shift in favor of the latter, as the use of HTML5 tools in mobile Website development is taking longer to impact the market.
"Over the next few years, growth in mobile advertising spending will slow due to ad space inventory supply growing faster than demand, as the number of mobile Websites and applications increases faster than brands request ad space on mobile device screens," Stephanie Baghdassarian, research director at Gartner, said in a statement. "However, from 2015 to 2017, growth will be fueled by improved market conditions, such as provider consolidation, measurement standardization and new targeting technologies, along with a sustained interest in the mobile medium from advertisers."
In the emerging markets of Latin America, Eastern Europe, the Middle East and Africa, mobile advertising growth will largely track the technology adoption and stabilization of emerging economies, but will mostly be driven by large markets such as Russia, Brazil and Mexico.
The study projects North America is where most growth will come from, due to the sheer scale of its advertising budgets and their shift to mobile. However, all regions of the world are expected to experience strong growth in mobile advertising spend.
Because the Asia/Pacific and Japan region is the most mature region for mobile advertising, growth is expected to slow between 2012 and 2017, averaging 30 percent a year.
"North America is the region with the strongest general advertising focus and investment. It is also the region where online advertising is most mature," Mike McGuire, research vice president at Gartner, said in a statement. "Overall advertising budgets are the highest, so when a portion shifts to mobile, in a multiplatform approach, it immediately impacts the market's scale."