There’s a new advertising strategy in town poised to explode over the course of the next several years — advertising on mobile phones. Mobile advertising is the infant of the marketing industry, only recently becoming a popular investment worth 1% of total domestic advertising spend. After a phenomenally successful 2010, many marketers are curious about what we can expect from mobile advertising in 2011. Today we explore this hot new trend and predict where it might be headed this year.
Domestic Mobile Advertising Market Will Hit $1 Billion
According to Lightspeed Research, the U.S. will grow into the second largest mobile advertising market in the world, second only to Japan. Last year, the domestic market was worth around $797.6 million, and is expected to hit $1 billion in 2011 and continue growing to $5 billion by 2015. This trend may be in response to the finding that mobile consumers are getting more comfortable seeing and using mobile ads. Both on mobile web and in-app, the Lightspeed report found that “12.3 million mobile users “have clicked on the advertisement and went on to purchase an item,” and 7.82 million more have clicked a mobile ad on their phone and ended up later buying it online.
Global Interest On The Rise
Just yesterday, February 15th, news of major global brands moving into the mobile arena came from Mobile World Congress in Barcelona. Business Insider reports that “Huge consumer goods and food/beverage companies are [at the conference] with big teams, taking meetings with potential global partners, as they begin to explore and spend more on mobile, both advertising and apps.” Though the names of these big brands weren’t disclosed, the article describes the coming movement as “unprecedented.”
Advertisers Will Focus On The Mobile Web
With all the buzz over Google and Apple’s in-app ad networks (AdMob and iAds, respectively), many mobile advertisers have been been experimenting with application advertising (Google recently forecasted a $1 billion revenue from AdMob alone). But Business Insider cautions marketers to turn their attention to the mobile web, as new statistics indicate that this is the new hot spot worthy of your ad dollars. Recent research shows that more smartphone owners are using their devices to access the web (34.5%) than for apps (32.3%). In addition, the number of owners getting online from their phones grew 8.2% during 2010 studies, indicating that Internet activity is becoming a very common activity. Because of these figures, and for the strong results mobile web advertising is delivering to marketers, Business Insider cautions: “Don’t miss the opportunity to advertise on the mobile Web by being totally app-centric.”
Location Ad Targeting To Increase In Popularity
One of the most popular features in mobile app and web use over the past year has been location based services. The explosion of Facebook’s “Places” and the rise of Foursquare stand as testaments to this trend, and in 2011 location based advertising will be coming along for the ride. The first indication of this coming boom was Facebook’s acquisition of young start-up Rel8tion, a mobile advertising company specializing in locational services. AllThingsDigital reports that the nine-month-old start up was focused on developing hyper-local advertising solutions, and that Facebook will likely use it in conjunction with Places to offer to target users based on where they check in.
And according to PRWire, NAVTEQ’s ad network LocationPoint recently teamed up with Poynt to offer location based coupons and ads to their users. Poynt is a popular GPS based mobile app for finding local restaurants, shops, and entertainment. Together, NAVTEQ and Poynt will be able to send their users discounts and offers to businesses near them.
Google To Dominate In-App Advertising
According to late 2010 research, Google’s AdMob is dominating the market share for mobile advertising, rising far beyond Apple’s iAps or any other third party ad network. When search and display advertising figures were combined, “Google’s share is nearly 60%, more than all the others combined,” concludes the data as covered by SearchEngineLand. In the Apple iTunes store, iAds is a major contender, but the study assets that “in the Android Market there’s no one within a mile of AdMob.” Look for Google’s share of the mobile advertising marketplace to grow in 2011 as the Android is expected to become the world’s most popular smartphone platform. So foreboding is their presence that SearchEngineLand predicts an EU antitrust ordered break up of Google over the Android ad market.
Innovation Will Come Largely From Startups
Despite Google and Apple battling for control over mobile advertising, and have shown a willingness to buy up startups they see as beneficial to their causes, Business Insider does not see the market heading for consolidation. Instead, they report that the opposite may be seen, and many of the major innovations that will shape the nascent landscape could come from slick new startups. “A slew of new mobile advertising startups are taking off in areas that have yet to meaningfully make the way to mobile,” they report. While mergers are no doubt in store for the coming year, the mobile marketing arena is just getting off the ground, and it isn’t likely that enormous organizations like Google and Apple will be able to keep up with the blistering speed of small, brilliant startup teams seeking to carve out a niche of this exciting world for themselves. Of course, in terms of sheer numbers, it is unlikely that 2011 will see a startup rise to take Google’s market share, but small fortunes are waiting to be made from those who can bring new solutions to the growing market.