Mobile advertising set to grow more rapidly than previously expected

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Mobile is set to become the main internet advertising medium at a spend of $99.3bn, ahead of desktop with $97.4bn, by 2017 – one year earlier than previously predicted. That’s according to the latest ZenithOptimedia Advertising Expenditure Forecasts

The agency previously forecasted that mobile internet advertising would overtake desktop by 2018. However, the sector has been growing more rapidly than expected. It grew 95% in 2015 and is set to increase another 46% this year, followed by 29% both in 2017 and 2018.

Mobile’s global ad spend share currently stands at 10.4% of total spend and will more than double by 2018 to 22.4%.

Mobile advertising not pacing itself

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Source: zenithoptimedia.com

In terms of ad spend contribution, mobile internet is clearly in the lead, tailed by TV, whilst magazines and newspapers as well as desktop are losing out.

Mobile internet leads global ad spend growth contribution

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Source: zenithoptimedia.com

China is one of the leading mobile ad markets. It is already pioneering some new developments that are likely to spread globally later. In the country, mobile advertising accounts for a staggering 56% of internet advertising expenditure in 2016 and 78% in 2018. Mobile advertising it set to account for 29% of the entire ad market this year, jumping in front of television to become China’s largest single ad medium.

Indeed, China is set to overtake the US to be the largest mobile ad market in 2017 at an average spend of $32.7bn compared to $30.5bn in the US.

Jonathan Barnard, Head of Forecasting, ZenithOptimedia, says:

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“China’s advertisers are leading the way in adapting to the rise of mobile technology. In China, mobile advertising is already the most important medium, and brand communications are mobile first. It’s only a matter of time before the rest of the world catches up.”

China on a roll

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Source: zenithoptimedia.com

ZenithOptimedia also highlights that the UK is the second-most-advanced mobile ad market. In fact, it’s the only other market in 2016 where mobile accounts for over half of internet advertising at 51%. By 2018, mobile advertising will account for 39% of total expenditure. However, a Brexit could damage the UK, costing it £70m in ad spend growth each year, a total of £1bn by 2030.

More traditional digital display ad formats such as banners are in decline, losing 3.1% in 2016. While there’s still going to be some growth over the coming years it will just run flat. The format has turned out to be a lot less effective on mobile devices. Consumers are reporting higher rates of intrusiveness and are more likely to click on them accidentally. Online video however has experienced a surge thanks to high quality content and improvements in mobile viewing experience.