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Mobile Becomes its Own Line Item on Ad Budgets

November 8, 2011

 

eMarketer's recently released 'Mobile Advertising and Marketing' report tells the story of an industry approaching maturity. Adoption rates for smartphones and other mobile devices are skyrocketing.  eMarketer projects that by 2015, 46% of the total domestic market will have smartphones. This trend, when combined with increased consolidation of networks, hardware and software providers, and ad channels creates a favorable ecosystem for marketers.

Brands and ad agencies will continue to invest heavily in mobile advertising for a number of reasons. The industry as a whole is swiftly moving out of the testing and incubation phases after recognizing favorable returns in 2010 and 2011. Mobile technology is interactive by nature and mobile ads yield greater opportunities for consumer engagement. Geolocation tools and insight into consumer usage habits provide for more highly targeted ad efforts.

As a result, eMarketer predicts that 2012 ad spend will be up 72% next year - hitting about $3.38 billion industrywide. James Smith, VP of Online & Emerging Platform Ad Sales for Disney Interactive Media, elaborates, "Mobile is starting to be integrated into the planning function at agencies, as well as within clients. For the most part, we're starting to see more real dollars being spent in mobile, and advertisers understand what's available to them within the space."

Miles Nadal, CEO of MDC Partners, one of the largest marketing and communications firms, describes mobile ad spend within the context of the market at large. In this video, he points out that 55% of his firm's ad spend is earmarked for social media and digital advertising, citing analytics and flexibility as benefits when it comes to mobile spending.

Unlike broadcast or print ads, mobile ads benefit from the technological capabilities inherent to mobile platforms. Tech specs make tablets particularly valuable real estate for advertisers. Video ads sparkle on an iPad and in-app digital experiences are so much richer than a simple 30 second TV spot. The physical act of consuming an ad on a tablet is fundamentally different from other traditional ad experiences. Tablet ads take over your screen - they interrupt - they require physical interaction. So while smartphone ads may provide the most reach, tablet ads may ultimately prove more effective.

Increased investment in mobile and its new found prominence relative to overall ad spend represent a more fully realized shift  in the marketplace as a whole.