As far as reports go, what we hope for is predictions, educated forecasts, and even slight insights regarding things to come. Reports like these ones help marketers to prepare for future downfalls or revenue boosts, and get excited about the things that will improve their advertising campaigns. Most reports have a strong focus on things to come a few years down the road, giving marketers a bit of room for planning, but a recent report shows the here and now and details what is to come for this year. The report comes from Gartner, and it shows what 2013 has in store for the mobile marketing world.
For 2013, Gartner expects that mobile advertising revenue will reach $11.4 billion, which is an enormous increase from last year. The growth of mobile is expected to be much more significant than others would have expected, as the estimate for 2013 brings expected revenue up $9.6 billion from 2012. From there, it is hard to say whether the growth will continue at the rate it is expected to hit, or even if the growth will multiply even further. However, Gartner expresses their expectations for the slightly more distant future, telling us that by 2016 mobile ad revenue will reach upwards of $24.5 billion.
The mobile advertising market took off even faster than we expected due to an increased uptake in smartphones and tablets, as well as the merger of consumer behaviors on computers and mobile devices,” said Stephanie Baghdassarian, research director at Gartner. “Growth in mobile advertising comes in part at the expense of print formats, especially local newspapers, which currently face much lower ad yields as a result of mobile publishing initiatives.
It seems that mobile is taking over a lot of the revenue from other, more well-known advertising platforms of the past, and truly is the new number one. But, what is it that makes mobile so popular with digital advertisers? Gartner quotes Andrew Frank, the research vice president at the company, in providing a bit of insight into what is making revenue skyrocket so significantly.
Smartphones and media tablets extend the addressable market for mobile advertising in more and more geographies as an increasing population of users spends an increasing share of its time with these devices,” said Andrew Frank, research vice president at Gartner. “This market will therefore become easier to segment and target, driving the growth of mobile advertising spend for brands and advertisers. Mobile advertising should be integrated into advertisers’ overall marketing campaigns in order to connect with their audience in very specific, actionable ways through their smartphones and/or tablets.
However, it appears that the amount of time consumers are spending with mobile is causing ad inventory to grow faster than advertisers can prepare properly and change where their spending is aimed. “This creates a surplus condition that is driving down unit ad prices which in turn has led to a situation in which a significant portion of mobile ad inventory is taken up by app developers paying for ads to promote their apps and get them more downloads, a category known as ‘paid discovery.’”