Mobile ad market up 132% as population spends more time on smartphones

The mobile advertising industry is expected to be worth £17 billion by 2017 as smartphones and other connected devices continue to impact the sector according to a new white paper from M&C Saatchi Mobile.

In the first half of 2012, the UK mobile ad market was up 132%, at £181.5 million, with digital accounting for 16% of all expenditure over the year. Mobile outlay was equal to just over 1% of the UK’s entire ad spend.

Smartphone penetration is also high across the globe with the world’s population spending significantly more time on mobile devices each day. On average, people spend 127 minutes per day on smartphones, far exceeding the desktop web device average of 70 minutes per day.

A Comscore MobiLens Report, released last October, also revealed that in most mature markets the penetration of smartphones is now over 50%. Spain comes in poll position with 63.2% of its population owning a smartphone, followed closely by the UK (62.3%) and then the US (59.1%).

The benefit of smartphones for the mobile ad industry is further demonstrated by the amount of people using their connected devices to surf the web and purchase goods. The Saatchi report found that 47% of smartphone users use their device to look up local information and 46% look up a brand’s mobile site.

The paper also predicts the impact that the roll-out of 4G will have on the mobile ad market. By May 2013, 4G will be launched by Vodafone, Telefónica, 3G, BT’s Nice Spectrum Ventures as well as EE.

Saatchi has said that 4G will accelerate rich media mobile ad space, however this won’t happen at a rapid rate.

At present, it is thought that the majority of subscribers will be unwilling to break long contracts to get 4G, largely because of high pricing.

However, there will be a rise in rich media advertising as the faster service allows for higher data flows to connected devices.

The Internet Advertising Bureau recently released statistics that showed how display banners and text ads contributed to a healthy 23% of all mobile ad revenue in 2012, with rich media ads making up 20% of this spend, ultimately representing 4% of the British mobile ad market.

“2013 sees a fundamental shift in favour of mobile technology,” said Maurice Saatchi, co-founder of M&C Saatchi. “The PC will be eclipsed by tablets and smartphones. Mobile advertising means scientific advertising – the Holy Grail. But the Gods have made Mobile a baffling medium.

“The more you know, the more complicated it appears. Apple, Google, Windows, BlackBerry, ad formats, exchanges, demand-side-platforms…it’s a world away from a 30 second commercial in prime time. Mobile brings marketers data to die for.

“Now what they need is someone to carry out a simple task – to decide, out of the map of newly available data, when to go and how to get there. That is why, in this new world, Brutal Simplicity of Thought is a painful necessity.”

James Hilton, Global CEO, M&C Saatchi Mobile, added: “Being a global mobile marketing agency places us in a great position to offer unique insight to marketers and agencies because we’re executing campaigns across multiple territories.

“Our aim is to share this knowledge impartially in order to help brands navigate the apparent complexities of the mobile space.”

To download the full white paper, click here.