Advertising budgets for mobile channels are expected to buck the downward trend and exhibit strong growth over the next five years, according to a new report from Juniper Research, with mobile ad spending projected to reach $5.7 billion dollars by 2014.
The constraints on budgets driven by the global economic downturn have had the effect of moving more ad spending from above-the-line to below-the-line channels. The need to engage with the consumer, as well as for a quantifiable ROI, means that advertisers increasingly see the tiny screen as key for reaching customers.
Context is everything, however. This encouraging upward growth is taking place in the still-nascent mobile advertising medium. But even by 2014, it will only account for up to 1.5 percent of total global ad spend.
"These investments still form only a small proportion of a brand's total advertising budget," says report author Windsor Holden. “Regardless of mobile TV's advantages — including its personal nature and facility for highly targeted advertising — advertisers will not commit more budget to it until they perceive that the audience for their advertisements has reached a critical mass."
Other findings from the Juniper report include:
- Mobile advertising response rates remain substantially higher than those in other media;
- By 2014, more operators and vendors will deploy idle-screen solutions, offering personalized advertising and personalized MMS-based campaigns;
- Mobile Internet will prove the most popular mobile delivery channel for advertisers in 2009, attracting the largest proportion of mobile ad spending throughout the forecast period; and
- Mobile cost per click through and CPM rates have fallen sharply in the last year mostly due to the economic downturn.
The report forecasts the number of users who receive advertising on their mobiles, both by region and by delivery channel; cost per clickthrough and CPM rates; number of users who respond to mobile advertising; number of responses per year; and total ad spending per channel.
“Mobile Advertising: Delivery Channels, Business Models and Forecasts 2009-2014” is available at the company’s Web site.
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