Mobile ad revenue worldwide increased sharply last year, rising 82.8% to $8.9 billion last year from $5.3 billion in 2011. Growth was highest in North America, at 111%, followed by Western Europe (91%), Latin America (71%), Central Europe (69%), the Middle East and Africa (68%), and Asia-Pacific (60%).
The findings come from a new report by the Interactive Advertising Bureau’s Mobile Marketing Center of Excellence, IAB Europe and global consulting firm IHS.
Among the regions, North America is now nearly even with Asia-Pacific in share of mobile ad sales, at 39.8% ($3.52 billion) to 40.2% ($3.55 billion). Western Europe represents 16.9% ($1.5 billion), with another steep drop-off to Central Europe at 1.3% ($112 million). The IAB earlier this year said U.S. mobile ad revenue in 2012 more than doubled to $3.4 billion.
North America has benefited from factors including a mature digital ecosystem, the presence of large mobile ad players, and having a large addressable market, noted Daniel Knapp, director advertising research at IHS, and author of the research.
Broken down by ad formats, search continued to claim the lion’s share of spending, with 52.8% of the total, followed by display at 38.7%, and messaging (third-party ads in SMS or MMS messages), with 8.5%. Search and display ad revenue grew at roughly the same rate last year -- at 88.8% and 87.3%, respectively -- while messaging trailed at 40.2%. Its share also fell from 11.1% in 2011.
Knapp suggested that
the emergence of free messaging apps, such as WhatsApp, Line, Skype and Facebook Messenger, are having an impact on traditional SMS-based advertising. Such apps collectively “are changing
messaging behavior, limiting ad revenue opportunities at the moment,” he said, adding that messaging as a share of operator revenues is also declining.
In terms of monetization, North America was the most efficient market, with mobile ad spend per subscriber of about $9 in 2012, twice that of the prior year. For Western Europe, that figure doubled to almost $3 last year, while Asia-Pacific trailed at $1.30.
Looking at formats by region, Asia-Pacific still leads the way in display, but North America for the first time overtook Asia-Pacific to become tops in mobile search, with 130% growth to nearly $2 billion in 2012. Knapp attributed that surge mainly to Google’s increased efforts to ramp up monetization of mobile search as more and more of that activity takes place on devices.
Latin America leads in growth in both search and display, in part because the region is starting from a much smaller total ad base ($50 million in 2012) than more mature ones like North America and Asia-Pacific. With that in mind, display was up 226%, and search up 242% in Latin America last year.
Among broader forces driving mobile ad growth, the IAB study pointed to rising smartphone adoption, the spread of 3G and 4G networks, more time spent on mobile devices and the growing focus by companies like Google, Facebook, Amazon and Microsoft on mobile media and advertising as well as devices.
The report’s findings were based on data collected from local IABs globally and harmonized to adjust for discounts and agency commissions, and variables such as smartphone penetration, 3G subscriptions and messaging volume. The modeling also takes into account the maturity of mobile ad markets and use of different ad formats.