Mobile advertising is going to capture a third of global market
The moment when a phone became bigger, got color and access to the Internet, marketers saw a big potential in this and decided to put ads on there. Mobile advertising has been developing since 2006.
For 12 years, mobile advertising has changed a lot. The first ads comprised plain text added to an SMS message. Then the turn of the banners came, and later location-based, social, video, and interactive formats also joined the mobile advertising methods.
Everything is going mobile. The modern phones have completely changed the world, people can make payments, navigate in an unknown place, buy stuff, etc. Dollars to doughnuts that mobile marketing has a particularly interesting future.
Nowadays mobile marketing is on the cusp of domination in digital ad industry. Mobile advertising is a given. It powers large segments of the digital economy, especially app stores and social media platforms.
Most studies show that in their analytical researches, they claim that in-app advertising is going to be a key driver of mobile growth. Let’s consider it in more detail.
Mobile advertising forecasts
By 2020 mobile advertising can bank over $180 billion
If you think mobile is big now, let’s say wait for one more year. Statista forecasts that by 2020 gross annual revenue on mobile advertising is projected to exceed around $189 billion. By 2020 Zenith predicts mobile advertising to have grown to $180 billion and particularly doubled $94 billion total.
Mobile is going to account for 65,6% of internet expenditure and almost 30% of all expenditure in 2020. This is more than all the traditional media. Turns out that mobile is the main driver for global ad spend growth.
In-app advertising will pass $200 billion by 2021
The app economy keeps on growing and it is not surprising that in-app advertising is on a similar tear. In 2017 app market watcher App Annie estimated that mobile marketing will grow from $72 billion to $201 billion in 2021.
They also say that the fastest growth will be in the APAC region which is growing at a rate of 25% of compound annual growth rate (CAGR). America will remain the largest country, according to ad spends, reaching over $100 billion by 2021.
People will spend more time online than watching TV
People used to spend nearly three hours a day using the internet for things like shopping, streaming music and video, playing games, etc. Last year a report of Zenith stated that by 2020 people will prefer to spend more time on mobile internet.
Half of digital advertising is going to be programmatic
The appearance of digital advertising changed the way how ads were bought and sold. Automated systems came to make different processes more automated and independent. They can bid for ad placing in real time. Technavio forecasts positive growth for programmatic through 2020.
App developers and advertisers use programmatic tools to arouse the interest of the customer by displaying relevant ads. The ads are customized based on data regarding the mobile usage of customers, location, and search keywords. Technavio researchers predict that global mobile ad traded programmatically will grow at a CAGR of about 15% until 2020.
Video and social are going to be on the top
Big phones, hi-res screens, and cheaper data are pushing the industry towards new formats in mobile advertising. Zenith media forecasts that video and social formats will grow 17% a year to 2020.
Alibaba continues controlling a third of China’s digital ad business
Chinese market has good opportunities for publishers and advertisers. According to Smaato, smartphone adoption rate in China reaches 73% among all phone users (statistics in October 2018). By 2022 the rate will overcome Germany and come closer to the US with an 87% adoption rate.
A giant Chinese market is controlled by three technology companies specializing in Internet-related services, products and artificial intelligence (AI). They are Baidu, Tencent, and Alibaba. Alibaba controls a third of all digital revenues among them. If your business is associated with China, do be quick! Build relationships with the company that has the potential to bring you high revenue.
APAC continues to gain momentum
Zenith predicts that Asia Pacific (APAC) region has to contribute 43% of new ad dollars to the $75 billion global market until 2020. The growth is largely driven by China which accounts for 22% of global growth, followed by India (5%), Indonesia (4%), Japan (3%), the Philippines (3%), and South Korea (2%). In total, APAC will account 33,8% of global ad spend in 2020.
Jonathan Barnard, head of forecasting at Zenith, said that the dynamics of APAC region is leading in global ad spend growth, booming at 5-6% a year. He bets that by the middle of the next decade it will be the biggest advertising region in the world.
In 10 years mobile advertising has gone from a curiosity to the most important marketing channel. Take a look, we use the phone to read the news, plan journeys, play games, etc.
The challenge for the marketer is to find ad formats that will get the message to the user. Actually, 68% of internet users don’t mind seeing ads if they aren’t persistent or aggressive. Strategies of mobile marketers should be well thought out to be effective.
According to Zenith research, mobile advertising is on track to reach 30,5% of global spends by 2020 to total $187 billion. This rise is a direct result of consumer choice of mobile. As a result, ad dollars on the smaller screen will push out significant market share from most other mediums by increasing an average of 21% per year to 2020.
How is this possible?
Simply, mobile advertising is oriented to specific customers. It helps brands achieve performance targets in the short-term. The TV or desktop platforms are mostly spread among all the members in a household.
It makes extremely difficult for brands to target the audience. Mobile advertising is more convenient in use due to the possibility of advertising customization and an accurate hit to the target audience.
While we work with pretty much all app categories