Global ad spend on mobile channels is expected to exceed US$11bn annually by 2015, up from US$3.1bn this year, according to Juniper Research.
The firm said this growth would be driven by brands seeking to capitalise on the personalised, targeted advertising and high levels of user engagement that mobile has to offer.
Juniper’s new Mobile Advertising Strategies report finds that following a surge in app downloads brands are now looking to either offer dynamic advertising in-app or, as is the case with Barclaycard and Volkswagen, create their own apps in order to increase brand exposure and engagement.
It said that advertisers like Starbucks and L’Oreal are making greater use of location-based campaigns, in which they geo-fence selected zones and push messages to customers that enter those designated areas.
However, the report said brands must be careful not to ignore other, more established mobile distribution channels. “While smartphone apps can be extremely effective at generating brand visibility, they are by no means the optimal means of reaching the target demographic for every product – or for engaging with that demographic,” said the report author, Dr Windsor Holden. “In many instances, a simple, interactive, opt-in SMS-based campaign might be far more effective.”
The report also found that increasing diversification within mobile ad networks is leading to the creation of dedicated premium/secondary premium networks and increasing role for ad exchanges. In addition, brands are indicating that the mobile share of the digital budget will rise significantly in the medium term. Ringback tone advertising, meanwhile, is expected to become increasingly popular, primarily in developing/emerging markets.
The Mobile Advertising White Paper is available to download from the Juniper website together with further details of this study.