Mobile and Internet Advertising: Fastest growing Sectors
Statistically, two interesting points jump out of IAB’s report last month on advertising and marketing activity for 2011. One has to do with mobile advertising which is growing exponentially and the internet business which will soon become the largest advertising market surpassing traditional broadcast television.
Mobile Advertising: Grew by $1 billion in 2011
Percentage-wise, mobile advertising grew by almost 150% to $1.6 billion, far surpassing performance of all other formats. I discussed that type of explosive growth late last year, Mobile Advertising: The Next Big Thing, http://stevenrosenbergmedia.com/?p=23, predicting that within 10 years, mobile will represent $7 billion annually. Smartphone adoption is cresting above 50% of all cellular customers in the US and growing and its higher in markets like the UK and Korea. I fully expect mobile advertising to jump by at least another $ billion in 2012.
Internet Advertising: Will become the largest market before too long
Internet advertising (search, banner, etc.) achieved over $9 billion in Q4 2011, the highest run rate for any quarter in its history. Internet advertising grew by over $5 billion or 22% in 2011 and now is the second largest ad market behind broadcast television. With its current trajectory, and barring any serious economic downturn, internet will surpass broadcast television sometime in 2013-2014 time frame.
IAB provides another chart showing historical growth of internet advertising by quarter, since inception which graphically illustrates the continued and dramatic upward annual growth.
Of the $31.7 billion of internet advertising, almost half or nearly $15 billion is search which grew a healthy 27% in 2011. Banner/Display which accounts for less than half of search grew by about 15% year over year.
Mobile and Internet Advertising: Contextually aware and growing
The next leg up for internet growth is the ability to serve more contextually aware advertising and content. Simply put, search advertising is generated by the customer looking for something. Contextually aware advertising is generated by companies who can serve a highly targeted ad or a piece of content based on the ability to predict what a consumer would like to see next based on the metadata of past viewing, searching and social activities on sites like Facebook. Many companies are chasing this holy grail with proprietary alogorithms and formulas. Interestingly, the growth of mobile smartphones, which combines search, content and GPS customer location information, is an important factor in this growth.