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Mobile Ad Spending Projected to Hit $18 Billion

Smartphone sales outpaced the sale of feature phones for the first time in 2013, Gartner reported.

By University Alliance on August 15, 2014
Mobile Ad Spending Sees Big Jump

The proliferation of mobile devices – from smartphones to tablets – is expected to continue fueling an uptick in spending on mobile advertising worldwide, with a high-water mark of $18 billion forecast for 2014, according to a recent analysis by Gartner Inc.

By 2017, mobile ad spending is projected to reach almost $42 billion – a significant jump from the $13.1 billion spent in 2013. Gartner, an information technology research and advisory company, reported that spending eventually will slow due to inventory outpacing demand.

For the next few years, however, growth will be driven by several factors, including “new targeting technologies,” Gartner’s research director, Stephanie Baghdassarian, said in a January 2014 statement.

Gartner reported in February that smartphone sales eclipsed the sale of feature phones in 2013, with smartphones representing 53.6% of all mobile phones sold. That marked the first time that smartphones had accounted for the largest slice of the mobile phone market.

Overall, there were 968 million smartphones sold worldwide in 2013, a 42.3% increase over the previous year. Samsung led all smartphone vendors, with 31% market share in 2013, followed by Apple at 15.6%, according to the February report.

At least through 2017, video-based mobile advertising will be boosted by the growing popularity of tablet computers, according to Gartner. In addition, ads that utilize “search/map” functions will see a benefit from the rising availability of geo-location data from consumers who allow their mobile devices to be located automatically or who use Foursquare or other apps to check in at different destinations.

Those factors should make mobile advertising channels particularly appealing to local advertisers, the report noted.

Globally, North America continues to dictate mobile ad spending growth, Gartner found. In the coming years, China and India are expected to contribute significantly due to high-growth economies and the rise of middle-class consumers.

The advertising research firm Magna Global previously forecast that total ad spending, including mobile, will increase globally in 2014, with revenues projected to top $521 billion. The report found that social media and search were the driving forces behind an 85% jump in mobile ad revenues in 2013.

For digital media, “the biggest game changer was the rise of social media and, more specifically, mobile social media,” according to Magna Global.

Category: 2014 Headlines