Study: North American, European mobile ad revenue to exceed $5 billion by 2012
By Erina Lin, Thursday 1 November 2007 at 21:17 :: General :: #795 :: rss
North American and European mobile ad revenue will surpass $5 billion in 2012, up from an estimated $106.8 million in 2007, according to a new study from Opus.
The North American market, primarily the United States, is estimated to account for $2.3 billion of the total in 2012.
The report indicates a combined annual growth rate of 116 percent for North America and Europe throughout 2012. The forecast covers ad categories including voice-based search, text messaging, application downloads, CPM-driven banners and pay-per-click and pay-per-call advertising.
"The mobile market is quickly evolving," said Greg Sterling, senior analyst of the Local Mobile Search program at Opus, according to Media Post. "We're not just talking about competition among the major search and portal providers like Google, Yahoo, Microsoft, and AOL, but carriers and OEMs like Nokia, which bought Navteq for $8.1 billion, and mobile ad network Enpocket."
The mobile ad business has been predicted for years to have rapid growth, but the total is “still a rounding error on the ad budgets of major U.S. marketers.” Sterling said the assumptions are due to the bullish forecast on the conservative side, Media Post reports.
For example, there will be an estimated 269 million handsets with mobile Internet access in the States, and 357 million in Western Europe by 2012. In estimating mobile revenue, "we've assumed the minimum likely value per call and a flat per-click figure of $1.27 throughout the forecast period, which is at the low end of the average online pay-per-call range today," Sterling said, according to Media Post.
The study also forecast click-through rates growing from seven percent this year to 10 percent in 2012.
Strong growth ultimately relies on industry stakeholders who create a better mobile experience for consumers, Sterling adds. “The iPhone is a start, and Google's stated goal of making mobile its next major focus could accelerate adoption of the mobile Web.”
Industry advocates have long been investigating the potential of mobile ad market due to its huge built-in user base. However, the ads still haven't followed. How much consumers are willing to use mobile for more than just talking is still an unknown issue.
"The ad infrastructure and sales channels already exist. Unlike the early Internet, they don't have to be built or gain credibility with advertisers. The users just need to start showing up and the ads will follow," Sterling said, according to Media Post.
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