In-app mobile adspend will reach $16.9 billion by 2018, up from $3.5 billion last year, a new report from Juniper Research has found. According to the report, growth will be driven by several key factors including improved targeting capabilities, as well as a trend for more effective interactive rich media ads to be deployed in preference to traditional static display advertising.
Tablets Close the Adspend Gap on Smartphones
The report – Mobile Advertising: In-App, Mobile Internet & Messaging Strategies 2013-2018 – argued that while smartphones currently account for approximately 70% of in app adspend, the growth in tablet users and usage would propel greater medium-term spend. It observed that tablet in-app adspend would be further fuelled by the fact that CPMs (Cost per 1,000 impressions) are significantly higher than those for smartphones, particularly for rich media ads, which also have higher CPMs than static display ads. By 2018, the tablet/smartphone adspend split will be almost 50/50.
Location, Location, Location
The report also observed that although app downloads will increase exponentially to 2018, the majority of in-app advertising expenditure is likely to be spent on advertising with social mobile giants such as Facebook and Twitter.
Nevertheless, report author Sian Rowlands remained optimistic about the opportunities for smaller developers: ‘As the mobile advertising industry matures, more sophisticated advertising solutions are being installed by leading players, with a clear trend towards utilising location-based advertising to drive greater relevance. These new technologies and formats will benefit stakeholders across the mobile advertising value network.’
Other Key Findings from the Report Include:
• Global mobile ad spend will surpass $39 billion in 2018, up from $13 billion in 2013.
• Rich media ad spend will surpass display ad spend in apps by 2018, as more engaging ad formats see huge uptake.
• Advertisers can increase conversions by simply adding mobile optimised features, for instance a ‘click to call’ button, or by linking to the relevant app store.