Ibis Capital, a London-based specialist media investment and advisory firm, has just released its predictions for the top trends set to impact the ad tech space this year. Mobile adoption and spending is a key driver of growth, accelerating emerging markets. Cross-screen video ads also topped the list of expectations for 2016.
According to its Global AdTech Investment Review, mobile ad spend is forecast to grow at a CAGR of 34% between 2015 and 2018 to reach $167bn. By 2018, mobile will represent 40% of total ad spend and two-thirds of total digital ad spend.
Global mobile ad spend
The US leads the way with a mobile ad revenue of $70.6 per user, followed by Europe, Middle East and Africa at $10.8 per user, Asia Pacific ($6.4) and Latin America ($1.3).
Mobile ad revenue by region
The number of mobile internet users has been growing steadily and overtook desktops in 2014. Both tablets and smartphones are predicted to continue to grow beyond installed base forecasts for smart TVs, wearables and computers. The average mobile web user consumes six hours of media each day.
Mobile internet continues to grow
Smartphone penetration also impacts purchase decisions with 83% of consumers planning to make a purchase on their phone over the coming 12 months and 68% having previously spent money on an activity on their phone. Smartphones (48%) have now also outranked TV (44%) as the greatest social influencer on purchasing decisions.
Charles McIntyre, CEO, IBIS Capital, says:
“We live in a mobile, data-driven world – a world where some 7.9 zetabytes of digital content were produced last year and 60% of global web users now use mobile as either their primary or exclusive means of going online. With a $171bn total in digital AdTech spend in 2015 alone, it’s becoming clear that the rapid growth in mobile device adoption is set to explode in the years to come. This acceleration will drive strong mobile spend and acceleration in emerging markets, where mobile revenue per user is expected to grow at almost twice the rate as in developed countries by 2017.”
Among the top five key trends, Ibis finds programmatic and real-time bidding to be on the rise, estimated to grow at 25% and 48% CAGR respectively to 2017. By 2017, only 17% of display ads are expected to be non-programmatic.
Online global video ad spend is another major area for growth, predicted to increase from $11bn in 2014 to $26bn in 2018. Video advertisers are also focussing on programmatic in order to optimise their spend.
In addition, marketers are predicted to optimise their campaigns further to fit across a larger variety of screens, saving costs and at the same time easing the experience for the end user. The number of screens per user is projected to reach 4.3 by 2020, providing a good opportunity to retarget campaigns across screens.
As global mobile payment revenues are projected to reach $3tn by 2019, white label payment widgets to offer cross-platform transaction are likely to flourish.
A vertical consolidation play for future proofing through sustainability
However, the report also cautions that with growing competition, there will be barriers to entry. McIntyre adds:
“Building an innovative business model with monetisation opportunities in different areas of the value chain needs to be a key priority for all organisations in the upcoming year. A strategy that offers vertical consolidation play for future proofing through sustainability is essential; this can be achieved by identifying these vertical opportunities, such as hyperlocal programmatic mobile advertising, cross-screen advertising and retargeting technologies”.
Successful mobile marketing campaigns of the future are driven by social data and targeted audiences as much as programmatic marketing platforms and the tools to measure and optimise ads.