Local Mobile Ad Sales To Reach $2 Billion in 2014

by Jack Loechner, Friday, July 26, 2013 6:15 AM

According to research from Mintel, more than half of all U.S. teens and adults own a smartphone; time spent reading newspapers and magazines runs higher on mobile devices than it does for print; the majority of Facebook users access it primarily via mobile; 10% of all engagement with media occurs on a mobile device. Considering this, it may not be surprising, says the report, that ad spend on mobile more than doubled in 2011 to $1.6 billion, and more than doubled again in 2012 to reach $3.4 billion.

And new research from Mintel reveals that 76% of mobile web users in the US have seen a mobile ad in the past month, including 91% of 18-24-year-olds and 83% of those aged 25-34, a total audience of 49% of all adults (when those without smartphones or Internet access are taken into consideration).

Billy Hulkower, senior analyst, technology and media at Mintel, reports that “…in the case of mobile ads, consumers will still be acquiring their first smartphones and tablets through 2015… sales growth deceleration will not occur at the same pace that would be seen for a hardware market…  sales may accelerate further as the audience for mobile media expands.”

As the nation becomes ever more connected, the advertising space brands buy into has never been more important…  proving the value of the mobile space in the world of advertising, says the report.

The most commonly viewed ads are app and banner ads. Roughly half of all 18-34-year-olds have seen ads in the past month in an app, in a banner, or in a mobile game. About four in 10 18-34-year-olds who use the mobile web have also seen a video ad and seen (or heard) an Internet radio ad in the past month. All of these penetration figures can be expected to rise on a monthly basis through 2014 as the late majority of adults adopt mobile media.

From 2010-12, sales of mobile ads increased from $0.6 billion to $3.4 billion, a compound annual growth rate (CAGR) of 138%. Local mobile ad sales, primarily from retail establishments, are also expected to propel mobile ad sales, with local mobile sales expected to rise from an estimated $1 billion in 2012 to a projected $2 billion in 2014. As the reach of mobile ads continues to climb, ad spending will become more desirable still.

Hulkower continues, “… the majority of adults and teens now own a smartphone, including more than three-quarters of the youngest adults and highest-income groups. Advertisers may feel squeamish about the personal nature of the phone and its small screen size, but it is now where the most desirable consumer audiences lie. Growth is likely to continue rising rapidly as more consumers adopt both smartphones and tablets, with the late majority boarding these hardware platforms for the first time… “

The report concludes by noting that it seems mobile couponing in particular presents a clear opportunity for driving sales via mobile ads. 18% of adults have redeemed a mobile coupon, including over 20% of respondents from households with more than $100K in annual income. Furthermore, the research reveals huge potential to increase mobile ad viewership by rewarding consumers for viewing ads by giving them free access to streaming media and apps that typically carry a small fee. 28% of mobile web users are willing to receive ads that support free usage of a mobile app, with this sentiment distributed somewhat evenly across age groups, though favoring 18-24-year-olds where the willingness increases to 34%.

For more information from Mintel, and access to several reports, please visit here.

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