Will Mobile Ads Overtake Online Display?

Chris Trayhorn
by Chris Trayhorn
August 31, 2011

We all know mobile is growing at an incredible rate but sometimes one needs to step back and just look at the potential size of the mobile marketplace. So try this for size: by the end of this year, the mobile ad market could outstrip the entire online display advertising sector.

Now admittedly, this is a bit of a stretch, but there are good statistics to back it up. Mobile app sessions average 4.2 minutes with 4.3 ads served during that time. A million smartphones are being activated every day, and consumers download an average of 65 apps per device. And smartphone users spend more time in mobile apps per day than they do online.

Put all that together and you get a  growth in mobile app ad inventory that is more than doubling each quarter. For the app analytics company that produced these figures, Flurry, this is where things get a little squirrely. They use an average cpm of $2.50 for mobile ads and then assume that all the inventory gets sold at that rate. Then they compare that total to the actual value of the online display ad market. Clearly, this comparison is BS – actual ad inventory sold vs. total inventory sold at a mythical rate – but it’s useful to get an idea of what is possible.

And this:

In June 2011, Gartner projected that mobile advertising revenue would double to $3.3 billion worldwide in 2011, and grow from around $300 million to over $700 million in 2010 in North America.   eMarketer, a research firm, predicts that U.S. mobile ad spending will top $1.1 billion this year.

For performance marketers the takeaway is that cheap media buys are easy to find in mobile – you just have to work out how to get them to convert.

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Chris Trayhorn

About Chris Trayhorn

Chris Trayhorn is the Founder & Editor of Revenue Performance magazine and the CEO of mThink LLC, a performance marketing services company based in San Francisco. Chris has worked on marketing campaigns with over 200 of the Forbes Global 2000. Friends say he knows a lot about a couple of things and a little bit about everything. He likes motorcycles, Manchester United and making pictures.

View all posts by Chris Trayhorn

One Response to “Will Mobile Ads Overtake Online Display?”

  1. dwaldack Says:

    Having been in the online advertising for going on 10 years, the single aspect of the industry that I find to be pure hype is surrounding mobile. I know I will get a lot of folks saying I do not have a clue, but hear me out.

    I am constantly asking this question to people from various walks of life as well as people in the industry. The question: “Have you ever click on a mobile ad?”

    Of the 2000+ people I have asked, the vast majority say no. Of the people that have said yes, almost all of them have said it was by mistake. This would help to explain the unusual click-through rates that mobile advertising is seeing.

    The other thing to consider is who is clicking on the mobile ads. Are they the target market that the advertiser is going after or is it the people with the least buying power, the kids.

    As a branding play I get it, but what is the ROI?