Mobile Ad Spend Set to Soar

Mobile advertising is poised to overtake desktop and become the primary internet advertising medium by 2017 – a year earlier than previously expected. That’s according to ZenithOptimedia’s new Advertising Expenditure Forecasts, which predicts that worldwide spending on mobile will reach $99.3 billion next year, compared to $97.4 billion for desktop.

“Mobile advertising is growing at a blistering pace,” ZenithOptimedia stated in a news release. “It grew 95% in 2015, and we forecast 46% growth for 2016, followed by 29% growth in both 2017 and 2018.”

Consumer habits are driving the rush to mobile. Nowadays, mobile devices like smartphones and iPads are most commonly used for accessing the internet rather than desktop computers. Not surprisingly, brands are eager to get their ads into mobile formats, which include anything from text ads via SMS to banner advertisements and videos embedded in mobile websites, download apps and mobile games. “The advertising market is catching up with the consumer as advertisers determine how best to communicate using the mobile internet,” the study notes.

Interestingly, mobile’s growing strength is influencing the formats of Web-based ads companies are likely to invest in. As a result, traditional display advertisements like banner ads – which tend to be intrusive in mobile formats – are forecasted to decline. Social media ads are expected to increase as they blend seamlessly into social mobile app newsfeeds.

In the promotional product industry, six out of every 10 suppliers and just over half of distributors report that their websites are mobile-friendly. Direct advertising on the medium by industry companies will likely be limited, however. “There may be a few direct marketing distributors that consider investments in mobile internet advertising, but not a great deal,” said Terry McGuire, senior vice president of marketing at HALO Branded Solutions (asi/356000), in an interview with Counselor. “That space is more impactful for B2C advertisers than B2B. It’s similar to the ‘old days,’ about pre-2010 or so, when a few industry distributors advertised in airline magazines to try to capture the attention of business travelers with little success.”

According to ZenithOptimedia, worldwide desktop advertising revenue peaked in 2014 at $98.9 billion. It then declined 0.2% in 2015 – a trend expected to continue through at least 2018, where desktop advertising will account for 42% of all internet advertising with mobile advertising totaling the remaining 58%.

While mobile advertising growth is significant in the United States, it’s even bigger in China. The study says that mobile advertising there comprises 56% of Web-based ad expenditure this year – a percentage expected to rise to 78% by 2018, ZenithOptimedia predicts. So big has mobile become in China that it will overtake television as the nation’s single largest advertising medium in 2016, the study reports.