Mobile Advertising to Reach $2.9 Billion in 2014: Report

By Nathan Eddy

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. 

This article was originally published on 2010-12-03