A new Gartner report estimates that worldwide mobile advertising revenue could reach $11.4 billion in 2013. That would be greater than an 18% increase from 2012, which saw $9.6 billion in mobile ad revenue. The analyst also predicts that worldwide mobile ad revenue will reach $24.5 billion in 2016.
“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.”
Japan and South Korea, with their large mobile adoption rate, currently have a lead in mobile advertising. Gartner predicts, however, that China and India will increasingly drive mobile ad growth. Also, as mobile ads become more integrated into large ad campaigns, it is predicted that the U.S. and Europe will catch up to Asia by shifting ad spending away from print and radio.
“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.”
Gartner warns, though, that ad inventory is growing significantly faster than advertisers can shift their spending. The analyst firm compares “paid discovery” advertising by app makers to early web advertising, and states that it creates “an inflated picture of revenue that may ultimately prove to be a bubble.”
“Some correction in the growth rate must occur before demand from brand and local advertisers catches up with supply, and more sustainable economics support a faster growth rate commensurate with consumer adoption,” said Baghdassarian.