Gartner: Mobile ad revenues on pace to reach $11.4B in 2013

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Worldwide mobile advertising revenues are expected to reach $11.4 billion in 2013, up from $9.6 billion a year earlier, according to a new forecast issued by research and advisory firm Gartner.

The Asia-Pacific market continues to lead the globe in mobile advertising gains and is expected to generate $4.8 billion in revenues this year, up from $4.3 billion in 2012. Gartner anticipates North America and Western Europe will narrow the gap this year, with the former increasing 2013 mobile ad revenues to $3.8 billion (up from $3.2 billion last year) and the latter raking in $1.9 billion (up from $1.6 billion).

Gartner credits growth in North America and Western Europe to advertisers' continuing efforts to integrate the mobile channel into their campaign plans, cannibalizing budgets historically allocated to print and radio efforts. The firm adds that consumer multitasking is driving preferences for multiplatform approaches, blurring the lines between channels and making it difficult to eliminate category overlap.

"The mobile advertising market took off even faster than we expected due to an increased uptake in smartphones and tablets, as well as the merger of consumer behaviors on computers and mobile devices," said Gartner Research Director Stephanie Baghdassarian. "Growth in mobile advertising comes in part at the expense of print formats, especially local newspapers, which currently face much lower ad yields as a result of mobile publishing initiatives."

Gartner forecasts global mobile ad revenues will reach $24.5 billion by 2016, but the company states that the various services and approaches within the segment are evolving at different speeds and in different directions. Mobile search, including paid positioning on maps and location-enabled augmented reality apps, is expected to drive mobile ad spending across the forecast period but will diminish in strength as time goes by. Mobile display ad spending will emerge as the leading revenue driver, with Web display spending outstripping in-app display spending in 2015. 

Gartner adds that as consumers spend more and more time on mobile devices, they are generating ad inventory at a pace far faster than most advertisers can shift their spending to the platform. The resulting surplus is driving down unit ad prices, with a sizable chunk of ad inventory now allocated for paid discovery--i.e., mobile developers paying for ads to promote their apps and fuel downloads. Many developers are now spending as much or even more on ad inventory than their apps generate, Gartner said.

"Some correction in the growth rate must occur before demand from brand and local advertisers catches up with supply, and more sustainable economics support a faster growth rate commensurate with consumer adoption," Baghdassarian said.

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