Mobile advertising’s upward trend is uncontested. Advertisers are moving more and more money into their mobile advertising budgets. This is the result of an oft-cited kind of industry law: “dollars follow eyeballs” – which means that consumers are spending more and more time with their mobiles and so advertisers have to follow in order to reach their target groups. The numbers speak for themselves: according to eMarketer, advertisers worldwide spent $42,63 billion on mobile ads in 2014. That’s 29% of 2014’s worldwide digital ad spend. This year, mobile’s share is projected to reach 40% of digital ad spending. Although this is exciting news for those in the market, this growth further heightens the degree of fragmentation within the industry, and the mobile advertising landscape is becoming more and more complex.
“The trend towards complexity repeats the developments of the rapidly growing classic desktop advertising industry from days past, however, the mobile advertising landscape expands and changes at an even quicker pace. The consolidation wave will also be much bigger and will happen much faster. A good thing, if you ask me”, Heiko Genzlinger, CEO of Trademob, comments.
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The mobile advertising industry is not only growing, it is also shifting in various ways. Here are some of the current dynamics of the mobile advertising ecosystem:
The mobile advertising landscape is becoming more complex and is establishing itself in the mainstream at the same time. The landscape includes all kinds of stakeholders, from startups to established companies such as Google and Facebook. A wave of mergers and acquisitions has begun to lead to a consolidation of services and companies, resulting in mobile companies beginning to resemble one another. At the same time, numerous startups are popping up due to changes in the rules of the game, entering the market with innovative technologies and solutions.
Mobile ad networks hold a central position in the mobile advertising landscape as the role of demand side platforms (DSPs) and mobile ad exchanges is growing. According to Business Insider, mobile programmatic ad revenues will account for 43% of US mobile display-related ad revenue in 2018, up from only a 6% share in 2013.2 Globally, IDC predicts that overall mobile programmatic ad revenue will account for 54% of worldwide mobile display-related ad revenue in 2018, up from a 9% share in 2013. No real surprise in view of such fragmentation.3 There simply is no alternative.
New ad formats are streamlining the mobile ecosystem, leading to a continuously diversifying industry. Mobile advertising started off with text messaging and was thereafter long dominated by banner ads. Now, we have more means than ever to transmit advertising messages to mobile users: rich media ads, video ads, native ads, expandable ads and many more. These are increasingly prevalent in apps. In fact, in-app ads are growing faster than those on mobile web. Juniper Research predicts that spending on in-app advertising will reach $17 billion by 2018. Compared to $3.5 billion spent in 2013, this is a significant increase.4
Trademob’s latest infographic, based on extensive research and expert insights, displays the key areas of the complex mobile advertising landscape, and where the main players fit in. We know that most industry landscapes are never finalized and the mobile market certainly is one to watch: still very young, developing at an extraordinary pace, week after week, and will remain under ongoing big changes for quite some time. If you feel a relevant player is missing, just let us know: MobileAdvertisingLandscape@trademob.com