Mobile Ad Revenue Forecast Is Mostly Sunny

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mobiletv.jpgADOTAS – I opened up my email inbox to discover Al Roker sitting atop a press release from BIA/Kelsey, his mile-wide smile taking up most my desktop.

“Hey, Al Roker,” I said. “You’re looking smart! Shouldn’t you be on TV?”

He chuckled with his eyes closed. “Probably, Gavin, but as you can tell looking out the window, it’s rainy, cloudy and utterly miserable in New York City, just like it was yesterday and just like it will be tomorrow. Besides, from your Casper-like complexion I can tell you never pull yourself away from your computer to go outside.”

“Look, man, there’s a lot of interactive ad news to cover and only so much light in a day,” I snapped back. “Anyway, what about the rest of the country? I bet it’s snowing somewhere in the Midwest.”

“Does anywhere else in the U.S. matter besides NYC?” he asked rhetorically. “Don’t let those Silicon Valley jokers trick you into caring about Cali. Now it may be gloomy in the Big Apple, but the U.S. mobile ad revenue forecast is looking bright as can be over the next several years.”

“Mobile ad revenue?” I scratched my chin. “You know, that’s something I write about.”

“It certainly is,” Roker beamed. “According to the topline numbers from BIA/Kelsey’s U.S. Mobile Ad Revenue Forecast, the space is going to grow from $491 million in 2009 to $2.9 billion in 2014.”

“Huh, that’s not bad,” I replied. “I mean, online advertising revenue hit $6.4 billion in third-quarter 2010 alone, but a 43% annual compounded growth rate is nothing to sneer at.”

“Not at all,” Roker said with a flash of his pearly whites. “In particular, mobile search will jump from $59 million in 2009 to a sunny $1.6 billion in 2014 (93% CAGR).”

“Wow, that’s very impressive. But what about mobile display? I thought it’s days of underperformance were coming to a close.”

“Well, it’s going to improve over the next few years, but just from $206 million in 2009 to a $803 million in 2014 (31% CAGR).”

My face morphed to show incredulity. “That’s it? All the improvements in targeting and rich media creative are going to equal a paltry 31% average yearly bump in revenue?”

Roker put up his hands in a calming fashion. “No reason to get negative — let’s call it partly sunny. It’s the same with SMS advertising — $226 million in 2009 to $562 million in 2014 (20% CAGR).”

“That also seems kind of lackluster.”

“What really will get your interest is that the local share of mobile ad revenue will rise grow from $213 million in 2009 to $2.03 billion in 2014 (57% CAGR). That’s up to a 69% share in 2014 compared to 44% last year.”

“So BIA/Kelsey think the next few years are going to be pretty bright for mobile search, especially on the local side,” I surmised. “That does make sense, but I’m surprised won’t see more revenue with constantly improving targeting and creative. Also, with a recovering economy, I expected more national advertisers to hop on the mobile bus, but perhaps lower barriers of entry for small and medium-sized companies will result in a flood of local advertisers that will dwarf incoming nationals.”

Roker shrugged. “Possibly — I’m just reading the charts, buddy.”

I smiled and extended my hand for a shake. “Thanks, Al Roker. You really brightened up my day. Now stop trying to read that embargoed press release from Google.”

“OK, OK,” he said, hocking me the million dollar smile once more. “You caught me — I was just curious how their display innovations are going. By the way, I see Mark Zuckerberg is waiting a few emails up — I think he’s going to argue you were dead wrong about Facebook Messages, but I bet he’ll do it in such a convoluted fashion that you’ll want to stab your ear drums.”

“Oh man, it is going to be a gloomy day.”

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