A Billion Here, A Billion There: Mobile Spend Forecast Upgraded

It's getting hard to keep up with the accelerated growth in mobile ad spend, and so eMarketer issued a substantial revision of a previously aggressive forecast. Back in June the company expected mobile ad spend to reach $7.65 billion in the U.S. Only two months later the research firm is adding nearly a billion dollars to that projection -- now seeing mobile media reaching $8.51 billion this year.

The increased forecast will bring the share of overall media spend on mobile to 5% and the share of digital ad spend to 20.1%.

This 95% growth in mobile spend this year puts device-based advertising on a trajectory to reach $31.13 billion by 2017. The annual spending increase will naturally diminish, but will remain in mid double digits for the next few years. eMarketer sees 2017 as an important tipping point, where 50.7% of digital ad spend will be going to devices.



As with online generally, search is driving the spend -- accounting for $4.3 billion this year and $15.3 billion in 2017. The velocity of the shift in search spend to mobile is truly staggering, and certainly explains why Google especially has been scrambling to revise its AdWords buying models to include all screens and to argue for a redefinition of what constitutes a mobile conversion. In 2010, eMarketer estimated that 2.1% of digital search spend was going to mobile devices, but this year it should account for 22.1% and then skyrocket to 59.6% in 2017.

Display, however, has a strong presence on mobile -- trailing only slightly behind search with $3.8 billion, and almost overtaking it by 2017 with $14.5 billion. Within display advertising, video is expected to be a breakout star, growing from a mere $576 million this year to $3 billion by 2017. By 2017, 48.4% of digital display ad dollars will be spent on mobile, eMarketer projects. 

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