Target and Toys R Us posted overall sales declines during the holidays.
As mobile commerce sites surge, so are mobile ads.
The number of mobile commerce sites is shooting through the roof; concurrently, the number of mobile ads being displayed is growing rapidly. Spending on display ads designed for mobile phones will hit $1.2 billion in 2015 in the United States, up from $313 million today, according to a projection from market research firm ABI Research Inc.
The growing spend on mobile advertisements, which are similar to online banner ads, largely will be driven by the increasing penetration of smartphones in the U.S. But the increase in ads will apply to all types of web-enabled mobile devices as consumers come to rely more on mobile technology, the report says.
“Marketers have increasingly been shifting budgets into mobile campaigns,” says Neil Strother, an ABI analyst. “This became evident during our research interviews with advertising agency executives, technology vendors and mobile ad network operators, who said they have been seeing year-over-year increases of 25% to 30% in campaign spending.”
The projections are based on interviews and consumer data, he says.
Retailers seeking to strengthen their brand identities and drive sales will be one significant source of the spending increase. The travel and entertainment industries are also poised to boost spending, and auto makers appears especially eager to use the channel to reach consumers, Strother says. “Health and lifestyle is sort of coming on board,” he adds.
Factors that could slow the growth of mobile display ads include regulatory barriers and some sort of data breach that sours consumers on the mobile channel, he says. But he doesn’t believe those are likely.
“There are always bumps in the road, but given the trend of people using mobile devices for much more than phone calls or messaging, I think the trend is pretty steady,” he says.