The spread of smartphones and the expansion of mobile media will help the global mobile ad market grow more than six-fold from $3.4 billion in 2010 to $22 billion in 2016, according to a new forecast by Berg Insight. That translates to a 37% annual growth rate, taking mobile from 3.8% of total ad spending to 15.2% in five years.
The Sweden-based research firm says that as digital convergence blurs the differences among devices, mobile will become a more seamless extension of online advertising. “The popularity of smartphones and the increasing availability of mobile media that can include mobile advertising are the main game-changers," said Rickard Andersson, Berg telecom analyst.
He pointed out that brands are increasingly integrating mobile components into traditional media campaigns, from entertainment and utility apps to the mobile Web to SMS campaigns. Marketers are also pushing advertising in relation to location-based services to target messages by time and place.
The emergence of HTML5 is another factor that could help accelerate mobile advertising by serving as a standard programming language for the mobile Web across multiple device types.
Still, the Berg report acknowledges that the mobile ecosystem is still fragmented, with a number of different players vying to establish strong positions in the nascent ad market. In particular, big Internet and technology players like Google, Microsoft, Apple, Amazon and Yahoo are battling to control large swaths of the mobile ad infrastructure.
Facebook is poised to enter the fray with the expected launch of its own mobile ad platform in early 2012 prior to its initial public offering. To date, the social networking powerhouse has not aggressively moved to monetize its mobile user base of more than 350 million worldwide.
For now, the industry still includes a range of specialized players, including mobile ad network Millennial Media, the ad exchange Smaato, and the operator-centric advertising solution provider Amobee.
But Berg expects further consolidation in the coming years that will leave a few dominant digital ad networks spanning all kinds of devices. BlackBerry-maker Research in Motion could be among the acquisition targets in 2012. Multiple reports Wednesday indicated that Amazon.com, as well as the team of Microsoft and Nokia, have considered takeover bids for the struggling smartphone maker.