Borrell Forecasts Big Mobile Growth

From Media Daily News.
by Erik Sass, Friday, April 16, 2010, 5:49 PM

After years of showing great promise but disappointing growth, mobile marketing is poised for explosive growth over the next four years, according to a new report from Borrell Associates titled "Local Mobile Advertising & Promotions Forecast."

This huge growth -- equaling the high double-digit percentage increases in the early days of the Internet -- will be driven largely by local mobile coupons, Borrell predicts. However, mobile advertising will also play a big role.

Part one of the four-part Borrell series, titled "Mobile Coupons Set to Cash In," sees mobile coupons growing from $2.7 billion in 2009 to $57 billion in 2014, for a cumulative annualized growth rate of 84% per year.

That's compared to a CAGR of 13% for online marketing in general, which Borrell pegs at about $80 billion in 2014. Mobile advertising will grow from a mere $285 million in 2009 to $11.3 billion by 2014 -- increasing from about a tenth of total mobile spending to about a fifth.

This growth will be enabled by the high penetration of mobile technology, with about 80% of the U.S. population owning a mobile device, including 31% who own a smartphone.

Borrell notes that the mobile market will grow at the expense of established channels like direct marketing and the Yellow Pages -- but also the Internet, its direct precursor and main competitor in the digital realm.

While marketers have long touted the potential of the mobile channel, it has noticeably failed to live up to bold predictions made earlier this decade, with relatively modest growth in spending on mobile advertising and marketing in the U.S. compared to Europe and Asia. Mobile ad spending in Japan alone was estimated to be $1.14 billion in 2009 -- four times greater than for the U.S.