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Mobile advertising, including display, search and in-app ads, is now growing six times faster than desktop internet.
Forecasts suggest that mobile advertising will continue to grow by an average of 50% a year between 2013 and 2016, thanks to the widening penetration of smartphones and tablets.
These figures come from ZenithOptimedia’s latest advertising expenditure forecast. It reveals that overall global advertising spend will rise from 3.9% in 2013 to 5.5% in 2014, with further growth expected to increase to 6.1% in 2016.
In other optimistic news it seems that advertisers are now committing to spending more in the Eurozone. Since the financial crisis began there has been a 15% drop in adspend, however this year will see Eurozone adspend rise 0.7%, the first growth since 2010.
The internet is the fastest growing medium for adspend by quite some distance though. Let’s take a look at the forecast and what the future holds in store for internet adspend.
Despite television’s dominance, attracting 40% of spend in 2013 almost double that of the internet (21%), internet adspend grew 16% in 2013 and is forecasted to grow an average of 16% a year between 2014 and 2016.
The fastest growing subcategory is display, which is forecasted to grow 21% a year till 2016. This is mainly in thanks to improvements in programmatic buying, allowing advertisers more control and better value for their spend.
In Ben Davis’s article What is programmatic advertising? he states the further advantages of this system:
[there is] greater accountability, with advertisers more sure of when and where their ads are showing and to whom. The targeting effectively allows advertisers to pay for a specific audience, rather than impressions served with the hope of reaching the right people.
Programmatic buying is also helping to sustain growth in other areas: social media adspend is growing 29% a year and online video is growing 23% a year.
Internet display is expected to overtake paid search (currently growing 13% a year) for the first time in 2015.
As disclosed at the top of the article, mobile adspend is now growing six times faster than desktop internet, with mobile advertising set to grow by an average of 50% a year between 2013 and 2016.
Mobile is the main driver of global adspend growth and ZenithOptimedia forecasts that mobile will contribute 35% of all the extra adspend between 2013 and 2016.
Global spending on mobile advertising was $13.4bn in 2013, this is 12.9% of total internet adspend and 2.7% of adspend across all media.
By 2016 it is forecasted that mobile adspend will rise to 28% of internet expenditure and 7.6% of all expenditure. Meaning that mobile will overtake radio, magazines and outdoor to become the world’s fourth largest advertising medium.
In the UK we have seen similarly huge increases already. Mobile adspend was up 127% in the first half of 2013, rising to £429m compared to the same period the previous year.
According to the IAB, mobile accounted for 14.1% of all digital advertising spend in the UK. Nearly double the 7.2% for the same period last year. With paid search accounting for the majority (63%) of mobile adspend with £271m.
With this in mind, it will be interesting to see if the UK follows the rest of the globe by suddenly back-peddling on paid search and re-investing in display advertising once again.
For more on Programmatic Marketing download our Programmatic Marketing: Beyond RTB Best Practice Guide.