Most Mobile Budgets Under $50K, Growth Expected

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When it comes to mobile advertising, just over half (51%) of brand marketers say they have built mobile into their ad strategy, either as part of wider campaigns or as a stand-alone effort. But mobile budgets are still small, with 55% spending less than $50,000 this year and only 7% planning to spend more than $300,000, according to a survey of 300 top brand marketing executives commissioned by the Interactive Advertising Bureau and conducted by Ovum Consulting.

Still, dollars allocated to mobile are expected to increase. The "Marketer Perspectives on Mobile Advertising" report found that nearly three-quarters (72%) of marketers are looking to hike mobile ad spending in the next two years, and 35% will boost budgets by more than 50%.

Where's that money going?

A branded mobile site was the most common type of mobile advertising (83%), with display advertising a close runner-up at 77%. More than half have employed branded applications and SMS text advertising, and over 40% have turned to mobile search, video, MMS (multimedia messaging service) and barcodes and mobile coupons.

When it comes to devices, the focus is on smartphones. Six in 10 executives flagged smartphones as a high priority, and nearly one-third (31%) point to tablets as a key platform. Feature phones have not been bypassed completely: 22% said they were a top priority, and marketers expect usage on regular smartphones to increase over the next two years. Only 10% identified e-books as a top device for advertising, and 3%, console connected games.

The report, whose findings were presented Monday at the IAB's "Mobile Marketplace" conference, also highlighted some of the hurdles facing mobile advertising. Among key obstacles to higher spending were device fragmentation, privacy issues and a lack of standardized metrics.

A majority also cited ad creative limitations as a drawback of the medium, which the study suggested could be partly a reflection that most of those surveyed don't use creative agencies for mobile advertising. But the vast majority (85%) of those marketers that are working with a creative agency on their mobile advertising objectives said these partnerships produced good results. Most were also reasonably satisfied with mobile advertising's ability to deliver on increased engagement (59%), increased brand awareness (58%), customer relationship marketing (57% and driving sales (54%).

The Ovum mobile study for the IAB was conducted from April to June 2011 and involved U.S. organizations currently engaged in mobile advertising, from seven distinct verticals: travel, financial services, CPG, retail, media and entertainment, hospitality and restaurants and automotive. It also encompassed four size-of-business categories (revenue less than $100m annual revenues, $100m-$500m annual revenues, $500m-$2 billion, and over $2 billion annual revenues) with local, regional and national ad focus.

On Monday, IAB launched a formal call-for-entries to its new Rising Stars Mobile contest that will result in new IAB-endorsed mobile ad formats. Winning entrants "will be selected based on their potential to propel brand creativity on mobile devices at scale." The trade group kicked off its Rising Stars initiative last September with a contest to come up with new display ad formats. Submissions for the latest effort will be accepted until October 15. 

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