Forecasts Don't Reflect Full Scope Of Mobile Spending

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by Mark Walsh, Yesterday, 6:31 PM

A new online ad forecast from market research firm IDC predicts mobile advertising will grow nearly 10-fold in the next 10 years, to $1.8 billion from $220 million this year. That's strong growth, but starting from such a small base, the total in five years will still account for only a small fraction of digital advertising.

Compare that amount to the $27.3 billion that search advertising alone will total by 2014, according to IDC. "Search ads may be less sexy than mobile online ads, but it's where cash registers will ring most loudly in the coming years," wrote analyst Karsten Wiede in his online ad report.

Despite the relatively small spending total, he called mobile a strategically important segment. He also warned that companies that didn't jump into mobile advertising now would regret it 10 years from now. That's "because if you don't stake a claim now both in terms of traffic and advertising market share as well as with regard to technology, you won't stand a chance to catch up later," he noted.

That sounds a tad alarmist, especially for marketers. Is inventory suddenly going to disappear on the nearly 5 billion mobile phones out there? It's only going to increase as more and more people adopt mobile Web- and app-centric smartphones that will expand the audience for mobile ads.

And brands that are ready to devote substantial dollars to mobile shouldn't have trouble lining up publishers, agencies and technology vendors more than willing to help them take the plunge.

At the same time, ad spending forecasts by IDC and other research firms don't necessarily capture the full amount of investment going into mobile. Like social media, a large portion of the spending in mobile is going toward earned media -- items like branded apps, promotional contests, mobile coupons and mobile Web pages. Such investments aren't typically reflected in the traditional third-party ad dollars projected in industry estimates.

So the economic opportunity tied to mobile advertising and marketing may be larger than the spending totals forecast, while the urgency about getting into the segment might be overstated. With so many years previously predicted as turning points for mobile advertising, it's hard for anyone to say with a straight face, "Get in now or miss the boat" on mobile.