IAB Forecasts Uptick In Mobile Brand Marketers' Ad Spend

by , Sep 24, 2013, 12:49 PM
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Brand marketing budgets in mobile have grown 142% in the last two years, according to a new study released Tuesday by the Interactive Advertising Bureau. The analysis, prepared by U.K.-based telecom research firm Ovum, also showed that the number of marketers with annual mobile budgets of more than $300,000 has increased to nearly a third (32%) from just 7% in 2011.

The 2013 update of the “Marketer Perspectives on Mobile Advertising” report surveyed 300 top-level U.S. brand marketing executives, evenly split among business-to-business and business-to-consumer companies. Within this group, almost three-quarters (74%) expect their mobile advertising spend will grow in the next two years -- a percentage that is similar to that of two years ago.

More than half (55%) project that mobile budgets will increase by less than 50%, while about one in five (19%), expect budgets to increase by more than half. When it comes to mobile campaign objectives, brand awareness is still the top goal, followed closely by increased engagement, driving sales, support for specific promotions, and customer relationship marketing.

The majority (61%) of survey participants said they were satisfied with the results of their company’s mobile activities, and 34% were fairly satisfied. Those figures are about the same as in 2011. A higher proportion of B2C companies, however, expressed satisfaction with mobile ad activities (66%) than B2B companies (47%).

Nine in 10 brand executives said they were either “satisfied” or “fairly satisfied” with their creative agencies in relation to mobile support. Use of such agencies has increased to 52% from 38% in the last two years, and less than half turn to media agencies -- unchanged since 2011. The report suggested this could stem from a lack of perceived mobile expertise.

Lack of agency expertise was cited as a challenge of “high importance” for mobile advertising by 15% of marketers, down from 21% in 2011. The study suggested that even more progress has been made in other areas in the last two years. Device fragmentation this year, for instance, was seen as a key challenge by 23% compared to 39% in 2011.

And privacy issues, cited as one of the top hurdles facing the industry by 40% of marketers in 2011, are now rated that way by only 22%. Still, the report acknowledged that much work remains to be done to barriers to further increase mobile ad growth.

The study findings, which the IAB unveiled at its MIXX Conference & Expo today in New York, also underscored the rising significance of tablets as marketing vehicles. While smartphone remain the key device for brands, 51% said targeting campaigns to tablets was a high priority -- up from 31% two years ago. And 75% expect to use tablets more in the next two years.

Mobile Web sites continue to be the most popular type of ad inventory, reflecting that mobile-optimized sites are still the primary way consumers connect with brands through devices. The study found that the use of rich media in mobile ads has increased to 35% of marketers from 19% in 2011. Conversely, use of static display ads has fallen to 49% from 77%. Only 19%, however, use mobile video advertising.

When it comes to new developments, executives identified responsive design, HTML5 native advertising, and programmatic buying as the industry’s top trends. 

"Mobile Money" photo from Shutterstock.

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