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2009-11-03
Mobile ad spend expected to increase significantly in 2010: Study


 November 3, 2009, by Giselle Tsirulnik

Mobile ad spend expected to increase significantly

Mack McKelvey is vice president of marketing at Millennial Media

The consumer-packaged goods, retail, entertainment, travel and restaurant categories are expected to lead mobile spending in 2010, according a new study by Millennial Media.

The same industry sectors are spending the most in mobile advertising today. The report also found that engagement leads the No. 1 sought return for an investment in mobile marketing, though opt-in, or list building, was cited as the most likely goal for fourth quarter campaigns.

“The significant increase in projected mobile ad spend in 2010 both by agencies and brands signals that they have found mobile to be a highly effective and efficient channel to reach their consumers," said Mack McKelvey, vice president of marketing atMillennial Media, Baltimore. "We anticipate the mobile Web audience will continue to grow at, or faster, than the projections reported by the Kelsey Group and numerous other organizations. 

"If this is the case, it is likely that more brands will place even more focus on mobile advertising in the remainder of 2009 and in 2010,” she said.

The largest of the survey participants said that they will spend less than $100,000 in mobile advertising in 2009. However, that number jumps significantly in 2010.

 

Mobile spending is expected to increase next year, with 31 percent of agency respondents stating that they will invest between $100,000 and $249,000.

Millennial’s “The State of Industry: Mobile Advertising” report found that about 15 percent of agencies plan to invest more than $1 million and 2.6 percent projected spending of greater than $5 million.

Also, more than half of fourth quarter mobile campaigns will represent between 1-10 percent of their clients’ total spending, but, for a few, that number will be a whopping 40-50 percent.

Nearly 75 percent of the 100 leading agency respondents stated that they have developed mobile campaigns for themselves or a client.

As an average value, brand respondents forecasted at least a 15 percent increase in spend in 2010.

The study found that mobile advertising performance meets expectations and remains valuable.

Among those who have executed mobile campaigns, 78 percent said the medium met their campaign goals and an additional 9 percent said mobile performed “beyond our wildest expectations.”

For 89 percent of agencies, the mobile facet of a campaign is just one portion of a multiplatform buy.

Nearly a third (30 percent) of agency respondents said mobile has become an “indispensable” part of the media mix.

Another 67 percent ranked mobile as somewhat valuable and only 2 percent said it was not valuable in their overall media mix.

More than 80 percent of agencies who have participated in mobile campaigns have hired or developed internal resources to support them.

Nearly 90 percent stated they are typically the ones to suggest that a client employ mobile as part of their campaign strategy.

“We were surprised to see some of the barriers to entry for brands and advertisers, namely that they felt that buying mobile advertising would require an investment in internal resources or that buying mobile seems complex," Ms. McKelvey said. "We would say to the first point, find a mobile ad partner who can bring your ads to market quickly, with robust reach, targeting and engagement. 

"Secondly, to the advertisers who believe that purchasing mobile is complex, our response is that you already know how to buy mobile," she said. "You buy online ads today, and the process is not all that different.  Again, this is an area where a mobile ad partner could help you plan and execute your campaign goals.”

Senior Editor Giselle Tsirulnik covers advertising, video, messaging, search, commerce ad video. Reach her at giselle @mobilemarketer.com.

 


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