Global mobile advertising spending is forecast to rise 37.40 per cent to reach $18 billion in 2014, up from the estimated $13.1 billion in 2013. The market is expected to grow to $41.9 billion by 2017, according to a study by research and analyst firm Gartner.

The display formats would make up most of the revenue, but videos will show the highest growth. Uptake of the audio and video format by the end of the forecast period is higher because the tablet form factor will drive video, and the tablet market continues to grow, it added.

"Over the next few years, growth in mobile advertising spending will slow due to ad space inventory supply growing faster than demand, as the number of mobile Web sites and applications increases faster than brands request ad space on mobile device screens," said Stephanie Baghdassarian, research director at Gartner.

"However, from 2015 to 2017, growth will be fuelled by improved market conditions, such as provider consolidation, measurement standardisation and new targeting technologies, along with a sustained interest in the mobile medium from advertisers,” Baghdassarian added.

With regard to the different ad formats used in the mobile sector, mobile display ad formats are collectively the single biggest category of ads, and will remain so throughout the forecast period, although this category will shift to mobile Web display after several years of higher growth in in-app display.

All regions of the world would experience strong growth in mobile advertising spend, although North America is where most of the growth will come from due to the sheer scale of its advertising budgets and their shift to mobile.

"North America is the region with the strongest general advertising focus and investment. It is also the region where online advertising is most mature," said Mike McGuire, research Vice-President at Gartner. "Overall, advertising budgets are the highest, so when a portion shifts to mobile, in a multiplatform approach, it immediately impacts the market's scale,” McGuire added.

In the Asia-Pacific, growth will slow between 2012 and 2017, averaging 30 per cent a year. Historically, the unusually high adoption of handsets for digital content consumption in Japan and South Korea has given the Asia-Pacific region an early lead in mobile advertising. Looking forward, Gartner expects the high-growth economies of China and India to contribute increasingly to mobile advertising growth as their expanding middle classes present attractive markets for global and local brands.

In the emerging markets of Latin America, Eastern Europe, West Asia and Africa, mobile advertising growth will largely track the technology adoption and stabilisation of emerging economies, but will mostly be driven by large markets such as Russia, Brazil and Mexico. From 2015, growth rates in this region will exceed the worldwide average.

rajesh.kurup@thehindu.co.in

(This article was published on January 21, 2014)
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