Mobile advertising will grow faster than all other digital ad formats
The growing smartphone penetration in the US allows advertisers to allocate more funds to catch the interest of mobile-savvy users. They do this by developing richer ad formats and more sophisticated targeting tools required by the rising mobile app market fragmentation and fierce competition.
New data from BI Intelligence finds that US mobile ad spend will top nearly $42 billion in 2018, rising by a five-year compound annual growth rate (CAGR) of 43% in 2013.
Why such an increase of app advertising spend? Which mobile ad formats and targeting options will be the most likely to generate the most revenues? How will the mobile advertising ecosystem be reshaped during upcoming years? According to BI Intelligence, the gap between demand and supply for mobile ads will narrow substantially as users’ enthusiasm grows for mobile-optimized ad formats (such as interactive rich media and native ads) while targeting improves.
Rich media and native ads are more engaging and less intrusive than banner ads. Personalization and better approach in ads creation will make display and video the fastest-growing mobile ad formats and will shift digital ad spend from desktop to mobile. US mobile display and mobile video ad revenues will grow at an astonishing CAGR of 96% and 73%, respectively, between 2013 and 2018.
Mobile programmatic ad-buying tools, including ads sold through real-time bidding (RTB), will account for 43% of US mobile display-related ad revenue in 2018, up from only a 6% share in 2013. Though programmatic will still be limited by the lack of robust cookie-based targeting on mobile. Search and social media will still account for the largest share of US mobile ad revenue during the forecasted period. Search is a strong format on mobile because of its convergence with local-mobile targeting.
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Branded Content Manager