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    Mobile Advertising Market to Top $38 Billion by 2018: Berg

    By
    Nathan Eddy
    -
    December 23, 2013
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      The total value of the global mobile marketing and advertising market will grow from $9.4 billion in 2012 at a compound annual growth rate (CAGR) of 26 percent to $38.1 billion in 2018, according to a research report from analyst firm Berg Insight.

      This will then correspond to 19.3 percent of the total online advertising market or 5.9 percent of the total global ad spend for all media. On a global level, mobile search advertising is estimated to represent the largest share of more than 50 percent of the total mobile ad spend, followed by display advertising and messaging, the report projected.

      “There is currently a mismatch between the ad dollars spent on different media and the share of time consumers devote to the various channels,” Rickard Andersson, senior analyst with Berg Insight, said in a statement. “Some channels such as print media receive a greater share of the total ad spend than can be motivated from a consumer behavior standpoint while other channels receive too little investments.”

      However, the report noted there are considerable regional differences in the format distribution depending, for example, on the level of maturity and local preferences across markets.

      In addition, numerous actors are involved in activities related to mobile marketing, including players from diverse backgrounds. Google has captured an important position, offering a range of mobile advertising alternatives such as mobile search ads, display advertising and video ads on YouTube.

      Meanwhile, Apple is further seeking to gain market share with the iAd platform. Facebook has since emerged as an important newcomer and is now generating half of its advertising revenues from mobile devices, with strong support from the application development community.

      “Mobile devices are on average devoted a double-digit percentage of consumers’ time, yet the channel only attracts a few percent of the total global ad spend,” Andersson continued. “This discrepancy can be explained by the relative newness of the mobile channel as an advertising medium and the formidable growth of mobile media consumption in recent years. Berg Insight expects that a correction in the ad budgets spent on different media is imminent, thus paving the way for a several-fold increase in mobile ad spend in the coming years.”

      Finally, several mobile operators including AT&T, Orange, SFR and the U.K. joint venture Weve are also active in mobile marketing. Leading specialized mobile marketing players also include Millennial Media, InMobi, Smaato, Nexage, Madvertise, and Amobee.

      The industry is in a phase of consolidation and notable transactions in 2013, which include Millennial Media’s acquisition of Jumptap and Twitter’s acquisition of MoPub. Google has also acquired the crowd-sourced navigation provider Waze, which offers location-based advertising, which is likely to impact advertisers who rely on spur-of-the-moment shoppers who make purchasing decisions based on proximity.

      Nathan Eddy
      A graduate of Northwestern University's Medill School of Journalism, Nathan was perviously the editor of gaming industry newsletter FierceGameBiz and has written for various consumer and tech publications including Popular Mechanics, Popular Science, CRN, and The Times of London. Currently based in Berlin, he released his first documentary film, The Absent Column, in 2013.

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