January 17, 2013, 11:54 AM

Worldwide mobile ad revenue will hit $11.4 billion this year

Retailers need to integrate mobile into overall marketing campaigns, Gartner says.

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Worldwide mobile advertising revenue will reach $11.4 billion in 2013, up 18.8% from $9.6 billion in 2012, according to research firm Gartner Inc. Worldwide revenue will reach $24.5 billion in 2016, Gartner predicts.

“The mobile advertising market took off even faster than we expected due to an increased uptake in smartphones and tablets, as well as the merger of consumer behaviors on computers and mobile devices,” says Stephanie Baghdassarian, research director at Gartner. “Growth in mobile advertising comes in part at the expense of print formats, especially local newspapers, which currently face much lower ad yields as a result of mobile publishing initiatives.”

More consumers are buying smartphones and tablets and are spending an increasing amount of time on the mobile devices, says Andrew Frank, research vice president at Gartner.

“This market will therefore become easier to segment and target, driving the growth of mobile advertising spend for brands and advertisers,” Frank says. “Mobile advertising should be integrated into advertisers’ overall marketing campaigns in order to connect with their audience in very specific, actionable ways through their smartphones and/or tablets.”

Geographical regions will evolve at different paces and in different directions, Gartner says. Historically, the atypically large adoption of handsets for digital content consumption in Japan and South Korea has given the Asia/Pacific region an early lead in mobile advertising worldwide, the firm says. Looking forward, the high-growth economies of China and India are expected to contribute increasingly to mobile advertising growth, as their expanding middle classes present attractive markets for global and local brands, Gartner predicts.

However, North America and Western Europe will close the gap on Asia/Pacific as the mobile channel gets more and more integrated with advertising campaigns, eating up budgets historically allocated to print and radio, Gartner says.

Mobile advertising revenue in North America hit $3.18 billion in 2012, Gartner says, and will rise 20.4% to $3.83 billion in 2013 and 22.5% to $4.69 billion in 2014. North American mobile ad sales will hit $8.87 billion in 2016, the firm forecasts.

Different types of mobile advertising also are evolving at different paces and in different directions, Gartner says. Mobile paid search will drive mobile ad spending across the forecast period, although it will diminish in strength as the period progresses, the firm predicts. Gartner says mobile display ad spending will grow and take over from mobile search. After several years of in-app mobile display ad dominance, mobile web site display ad spending will overtake in-app display in 2015, Gartner says.

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