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Mobile Ad Spend on the Way . . . Up?



While there are a multitude of reports having marketers bracing themselves for this recession, there are still a number of optimists who say that the best is yet to come. The Kelsey Group is one such optimist, reporting that mobile ad spend is on the way up, and mobile search will lead the way.

Their prediction? Over five years, mobile ad spend will increase 81.2% annually (compound growth rate), going from $160M last year to $3.1B (yes, billion) in 2013. Over the same period, mobile local search will grow from 1/8 of the total mobile spend to nearly half—from $20M to $1.3B, consistently constituting a little over half of the mobile search spend.

Usually, when I say “mobile marketing” (and even if I’m so specific as to say “mobile search marketing”), a lot of people take that to mean SMS (text message) marketing. While mobile marketing encompasses a lot more than just texting, SMS accounted for $100M of last year’s mobile ad spend according to Econsultancy, with mobile search generating $39M (including the $20M mentioned in local mobile search above) and display generating $20M.

However, in five years, the split will look vastly different:
mobileadspendkelsey
In 2013, search will account for $2.3 billion in spending. Mobile display ads will account for $567 million, with SMS advertising accounting for $270 million in spending.

Kelsey Group also predicts that local searches will see the greatest lift in mobile. Last year, 28% of mobile searches had local intent; by 2013 that proportion is expected to grow to 35%. Focusing on iPhones only, about 15% of mobile apps are local.

Right now, there are 54.5 million mobile Internet users in the United States, representing a quarter of the online population.

What’s your biggest take-home from these findings? Do they seem overly optimistic in our current economic climate, or do you think we’ll turn the economy around in time to see numbers like these?