According to Berg Insight, that will account for as much as $22.45 billion (17.2 billion) of the global industry in 2016.In 2016, one out of almost every seven digital ads will be served to a mobile device. Mobile advertising will account for 3.8% of all global ad spending on all media.
To those closed off in tech bubbles, these numbers may actually seem a little small. "But, mobile is everywhere," they will say, "doesn't 15.2% seem a bit low?" Look at it this way: mobile is a content delivery platform that is many ways is still immature. What will the ad spend be in 2012? 2025? Probably a lot higher than 15.2%.
It is easy to forget that advertisers still like to throw their money at old media properties. Television is king. Followed by print magazines and newspapers, Internet/digital, Radio and location/sponsorships. If everyone has a smartphone, why do advertisers not spend as much on mobile? Advertisers are often slow to jump on a moving wagon. They like to go with what has worked in the past because it is tried and true. At the same time, they like eyeballs. As many as possible engaging in a variety of ways.
"We have a couple different dynamics at play here. First, there's the growth of the digital market in general. Second, this new growth of tablet-based advertising.," said Paran Johar, CMO of Boston-based mobile advertising company Jumptap. "Third, the growth of mobile advertising and smartphones. Fourth, the shift of primary consumer internet touch point moving from PC to tablet/smartphone."
There is a distinct difference though between how an ad impression is created versus how affective it actually is. The whole "digital dimes for analog dollars" comments still exist. An ad is worth less in the digital world. There are also a lot more of them. The trick will be to make mobile advertising relevant and localized. That is what Jumptap does but the fact of the matter is that most people are going to ignore most advertisements most of the time.
"Consuming mobile internet content is a very active experience," Johar said. "With one to two ads per page, mobile users are more focused on the ads themselves. Additionally, if you add targeting and relevancy to the mobile mix, consumers will be more engaged than with ads on a PC."
How are mobile advertisers supposed to make money if nobody is paying attention? $22.45 billion industries do not just crop up overnight. Mobile advertising is going to change along with the mobile landscape. That means that the ad, like the app it is being featured in, will have a local component. It will also have an engagement layer, such as gamification or social sharing and commenting. Also, like mobile apps, ads will harvest a lot of data about users to have the ability to hone directly in on what people are and what they are likely to want. Seems intrusive? That's advertising.
"App publishers can increase engagement rates by driving relevancy to their target audience; the more the relevant the ad, the more consumers will interact," Johar said. "Adding engaging rich media add units takes it to the next level - it's the perfect mixture of context (leveraging data and targeting or relevancy) and content (engaging rich media ads)."
What does this mean for developers? It means to keep on creating terrific mobile apps that have scope, depth and reach. Continue to make dynamic HTML5 mobile websites that engage users and provide functionality. The pie is going to get a lot bigger in the years to come and there will certainly be a slice of it from the advertising world to buoy your efforts.