Mobile Advertising To Hit $1 Billion in 2011

by Jack Loechner, Nov 24, 2010, 8:15 AM

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A whitepaper from Smaato, utilizing consumer research for mobileSQUARED by Lightspeed Research, acknowledges that the US is the second largest mobile advertising market in the world, behind Japan, which is the world's only billion dollar mobile advertising economy. In 2010, the US mobile advertising market will be worth $797.6 million, rising to $5.04 billion in 2015.

The US has a mobile population exceeding 300 million, and a mobile internet user base on the verge of surpassing 100 million. Mobile advertising budgets are high with the average mobile advertising campaign in the US between $75,000-100,000. However, the research reveals that 53% of US mobile users claimed not to have seen an advertisement on their mobile.

The US has a population approaching 310.6 million, and there are a fraction over 300 million active mobile subscriptions in the US, of which, almost one-third use their mobile phone to browse. The mobileSQUARED research has highlighted that around 50% of the US mobile internet users are doing so on a daily or almost daily basis.

In the US, the average mobile advertising campaign spend is between $75,000-100,000, and, on average, creatives receive 10-15% of the budget which could total $15,000 and provide the scope to develop an ad delivering a rich consumer experience. This equates to a little under 8,000 mobile advertising campaigns, and an average of 21.8 new campaigns per day.

US Mobile Ad Spend (% of Total)
Ad Spending For:	% of Total Budget
Opt-in messaging	20%
Mobile games/music/TV	3
Apps	2
Search	46
Banner ads	29
Source: mobileSquared, October 2010

Yet mobile remains a fraction of total advertising spend in the US, notes the report. According to ZenithOptimedia, the US is set for a 2.4% increase in advertising spend to $151.5 billion in 2010 - with global ad spend for 2010 expected to be worth $449.5 billion. For the US advertising industry, mobile represents 1% of total spend.

A nationally-representative survey of US mobile phone users conducted by Lightspeed Research for mobileSQUARED, revealed that 49 million of US mobile users have engaged with an advertisement of some description on their mobile phone.

• 12.3 million mobile users "have clicked on the advertisement and went on to purchase an item"
• 28.86 million users have "clicked on the advertisement and looked at the item advertised but did not buy it"
• 7.82 million mobile users have "clicked on the advertisement and looked at the item advertised on their mobile phone and ended up buying it online"

The consumer survey revealed the expected naysayers: with

• 21.6% or 64.9 million mobile users "doubt they will ever click on an advertisement on their mobile"
• 53.1% of respondents claimed to have "never seen an advertisement on their phone"
• 50% of the US population is yet to form an opinion with regards to mobile advertising, according to the report

The report concludes that the US mobile advertising marketplace will become the second billion dollar market after Japan during 2011. By the end of 2010, mobile advertising will  represent 1% of total ad spend in the US., expected given digital was an entirely nascent medium 10 years ago, and has laid down the foundations for mobile to flourish.

For more about the study and access to the PDF file Whitepaper, please visit Smaato here.

 

 

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