Commentary

Mobile Search Ads Contribute $350 Million To $1 Billion U.S. Spend

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Spending on mobile search advertising in the U.S. will not reach the billion-dollar mark until 2014, but will contribute substantially to the $1.2 billion that U.S. advertisers will spend this year, according to eMarketer.

Mobile search ads will command nearly $1.8 billion of the $4.4 billion marketing ad spend by 2015, rising at a compound annual growth rate (CAGR) of 57%, according to the eMarketer report. The growth began in 2010 at about $185 million, rising to $349 million in 2011, nearly $600 million in 2012, and $908 million in 2013.

The number of smartphone users in the U.S will rise 49.6% to $90 million in 2011, up from 60.2 million in 2010, eMarketer estimates.

To reach those users, advertisers will spend nearly $1.23 billion on mobile advertising this year in the U.S. -- up from $743 million last year, according to eMarketer. By 2015, the U.S. mobile advertising market should reach nearly $4.4 billion. This includes spending on display ads, such as banners, rich media and video, as well as search and messaging-based advertising, and ads viewed on both mobile phones and tablets.

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In September 2010, eMarketer forecast that marketers would spend $1.1 billion in 2011, up from $743 million in 2010 -- with the increase a result of an uptick in mobile Internet use, the research firm said.

While search continues to rise and gain a significant amount of ad revenue, messaging-based formats still take the largest piece, accounting for about $443 million in spending. But in 2012, banners and rich media will contribute as much as search -- each gaining 33% of the U.S. ad spend, or about $595 million. That puts them in front of messaging, which falls to 28.2% of the mobile ad spending in 2012.

By 2015, banners and rich media and search will dominate further, and messaging will have shrunk to 14.4% of the total -- although still growing in terms of dollars.

Video remains the fastest-growing mobile ad format, but from the smallest base, according to eMarketer. Advertisers will spend $57.6 million this year on mobile video ads, reaching $395.6 million in four years -- growing at a compound annual rate of 69% between 2010 and 2015.

 

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