Mobile Advertising to Reach $2.9 Billion in 2014: Report

According to BIA/Kelsey’s U.S. Mobile Ad Revenue Forecast
(2009-2014), U.S. mobile advertising revenues will grow from $491
million in 2009 to $2.9 billion in 2014, representing a compound annual
growth rate (CAGR) of 43 percent. The forecast comprises advertising
placed in mobile search (text advertising applied to search queries on
mobile devices), display (display advertising applied to app and mobile
Web inventory) and SMS (commercial SMS messaging).

During the forecast period from 2009 to 2014, BIA/Kelsey said it
expects U.S. mobile search ad revenues to grow from $59 million to $1.6
billion (93 percent CAGR), U.S. mobile display ad revenues to grow from
$206 million to $803 million (31 percent CAGR) and U.S. mobile SMS ad
revenues to grow from $226 million to $562 million (20 percent CAGR).

The firm also said it expects U.S. mobile local advertising revenues to
grow from $213 million in 2009 to $2.03 billion in 2014, representing a
57 percent CAGR. This represents 44 percent of total U.S. mobile ad
revenues in 2009, growing to 69 percent in 2014. BIA/Kelsey defines
mobile local advertising as that which is targeted based on a user’s
location and/or actionable locally. Local targeting occurs to varying
degrees and with different methods within each of the advertising
formats examined in the forecast (search, display, SMS).

“We expect to see more bundling of mobile advertising by digital and
local media companies, in an effort to lower the barriers for adoption
by small and medium-sized businesses,” said Michael Boland, program
director for BIA/Kelsey. “As a result, mobile advertising will move
down market to SMB and mid-market segments, increasing the overall
revenue opportunity and share of geotargeted ads. This down-market
shift will be coupled with large advertiser evolution and adoption of
mobile local ad distribution.”

According to a recent study by Mojiva, mobile advertising is poised to
experience large growth opportunities. The data set revealed a growing
experience base with mobile advertising, across all three primary
constituent categories: publishers, brands and agencies. Publishers
who’ve developed experience with mobile advertising jumped 9.7 percent,
brands nearly 12 percent and agencies seven percent. 

The report found mobile ad spending is expected to increase this year,
dramatically for many. Of 140 agency respondents who saw mobile
marketing increases (compared with 15 who saw declines), the average
hike was pegged at 33 percent. Some 21 percent predicted mobile
marketing spending increases of 10 percent.  A full quarter
predicted increases of greater than 50 percent, and 10 percent
predicted increases of greater than 100 percent.