Mobile advertising bucks downward trend

Advertising budgets for mobile channels are expected to buck the downward trend and exhibit strong growth over the next five years, according to a new report from Juniper Research.

The report found that constraints on budgets, imposed in the wake of the global economic downturn, had resulted in an increasing migration of adspend from above the line to below the line channels. The need for engagement with the consumer, and a quantifiable ROI, meant that mobile was increasingly being perceived as a key medium through which to pursue this strategy.

However, the Juniper mobile advertising report stressed that, while this was encouraging, the level of growth had to be put into context; that mobile advertising still remained very much a nascent medium, and even by 2014 it would only account for up to 1.5% of total global adspend.

The report noted that, while a number of major brands had made relatively large investments in the mobile platform, advertisers have yet to be fully convinced that mobile has sufficient reach to warrant substantive adspend.

As report author Dr Windsor Holden pointed out: “These investments still form only a small proportion of a brand’s total advertising budget: Regardless of mobile’s advantages – its personal nature, the facility for highly targeted advertising – advertisers will not commit more budget until they perceive that the audience for their advertisements has reached a critical mass.”

Other findings from the Juniper report include: Mobile internet will become the most popular mobile delivery channel for advertisers in 2009, and will attract the largest proportion of mobile adspend throughout the forecast period; mobile cost per clickthrough (CPC) and cost per mille (CPM) rates have fallen sharply over the past year in large part due the negative impact of the economic downturn; and mobile advertising response rates remain substantially higher than those in other media.

Juniper Research assesses the current and future status of mobile advertising based on interviews, case studies and analysis from representatives of some of the leading organisations in the growing mobile advertising industry.