Marketing budgets seeing expansion for mobile ads

Marketing budgets for mobile ads have been expanding over the past couple of years.

Posted on Oct 15, 2013 by YuMe

More people than ever before own smartphones, tablets and other similar devices, so it is no secret that organizations will see ads for mobile become a more prominent figure on their budget. According to a recent report from the Interactive Advertising Bureau, ad revenues are up to $20.1 billion, which the organization called a "landmark." This is an 18-percent increase over 2012, according to the organization. Another recent report showed that these budgets shot up 142 percent between 2011 and 2013 alone. The number of marketers who kept mobile advertising budgets of $300,000 or more went from 7 percent in 2011 to 32 percent in 2013.

Highlights from this report show that mobile revenue alone was up to $3 billion in the first half of 2013, a 145 growth from the same period last year. Digital video was about $1.3 billion during the first six months of the year, a 24 percent increase over the previous time last year, and display-related ad revenue totaled $6.1 billion, or about 30 percent of the revenue in this time period.

"Digital has steadily increased its ability to captivate consumers and then capture the marketing dollars that follow," said Randall Rothenberg, President and CEO, IAB. "Mobile advertising's breakneck growth is evidence that marketers are recognizing the tremendous power of smaller screens. Digital video is also on a positive trajectory, delivering avid viewership and strong brand-building opportunities."

Highlights from the latter report showed:
- 73 percent of marketers believe their mobile advertising budget will increase further in the next two years, which is a similar number to those who said this in 2011
- 19 percent of respondents believe their budget for ads on mobile will increase more than 50 percent in the next two years
- Privacy is still an issue that needed to be tackled, as 40 percent said they are concerned about it

Certain areas have improved since 2011, as 39 percent said operating system fragmentation was a concern back then. Now, only 22 percent say that. Metrics have also seen some improvement, as 31 percent said this was a big challenge in 2011, whereas only 13 percent say it is standing in their way today. Anna Bager, vice president and general manager of the Mobile Marketing Center of Excellence at IAB, said there has been an impressive growth and there will likely be more to come in future years.

"These findings reaffirm that publishers need to make mobile a top priority in order to take advantage of strong brand marketer demand," she said. "In addition, it is a signal to all of us at IAB that we must continue initiatives, such as our HTML5 guidance for digital advertising, to fuel the mobile arena."

Tablets versus smartphones an important debate
Forbes contributor Robert Hof wrote that the optimization of digital video is high right now, as companies are interested in this as a tool because it provides the ability to reach more young viewers. Randy Cohen, president of researcher Advertiser Perceptions, told him that they see mobile video ads as something that will grow large in the next year to 18 months. However, there is still a split in how smartphones and tablets will be used, as smartphones are seen as the best way to reach customers but tablets are likely a better way to view ads.

ClickZ contributor Jonathan Blaugrund said smartphones tend to be used differently than tablets, as the phone is used most for guidance while the tablet is more likely to be utilized to make purchases.