Mobile to account for 72% in display advertising revenue by 2020

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Over three-quarters of all online display advertising revenue will be attributed to mobile by 2020. That’s according to findings from IHS Markit, the analytics and solutions provider.

Mobile display advertising worldwide increased to a whopping 72% in 2015 compared to the year before and accounted for 45% of all online display ad revenue at a total $29bn.

In 2016, global mobile advertising grew 42% to $41bn. This is the first year that it will generate over half of all online display advertising revenue at 55%.

Qingzhen Chen, senior analyst at IHS Markit, explained:

“Mobile advertising has grown stronger than any other medium in the last four years, and now accounts for a significant proportion of online advertising revenue.”

A spotlight look at China reveals that the country has seen a surge in online advertising. Indeed, at $33bn in revenue for 2016, the country is the second largest online ad market globally. Online increased 17.5% in 2016 and will grow another 14% in 2017, driven by growth of online video. Chen adds:

“In 2016, the Chinese online ad market went through some turbulence and reshuffling. China introduced its first set of online advertising regulations, which in the short term had reduced online advertising revenue, but in the long term, we expect to see a more sustainable online ad ecosystem from this development.”

The increase in digital is also noticeable in the decline of TV, which declined 2.7% in China las year. IHS Markit said it expects TV to decline further by another 3% in 2017.

The big three online business Baidu, Alibaba and Tencent, referred to as B.A.T. in China, own 36.5% of the total advertising market at $24bn in 2016. Indeed, they have “absorbed” much of the TV brand budgets and continue their expansions.

B.A.T. made a total of 262 investments and 27 acquisitions between 2009 and 2016.

Chen concludes that the growth of Chinese companies globally, will only increase investment in neighbouring countries.

“Regions like Southeast Asia are benefiting from the rise of a middle class, consumerism, and a mobile-first young population. The emerging Asian markets present a huge business opportunity for the trio to export its video content, games and e-commerce abroad.”

For more information and insights you can meet IHS Markit at the MWC until 2 March 2017.