39 per cent of mobile ad spend is coming from new budgets, according to a survey of agency staff for the latest annual IAB Mobile Snapshot.

Although another 43 per cent of more than 300 people surveyed said mobile spend is being taken from other areas, the IABs head of mobile, Alex Kozloff, said the increasing willingness to set money aside shows that the channel is going from strength to strength.

The survey found that understanding of mobile advertising has grown by the largest amount seen in the past four years during 2013. 64 per cent of respondents now say they have an above average understanding of how the industry works, which has grown by 28 per cent since 2012.

Location-based advertising, static banner ads, apps and SMS marketing were all cited as the most widely understood forms of advertising in the sixth annual IAB report. But 48 per cent of respondents said they still have no experience of mobile privacy, followed by SMS shortcodes on 40 per cent and responsive web design on 38 per cent.

No idea about privacy and brand safety

Mobile privacy and brand safety remain the top challenges for UK media agencies, the report found, with 51 per cent and 41 per cent of people respectively revealing they have ‘no idea’ about these issues. Respondents said a lack of client understanding was the biggest issue preventing mobile becoming a larger part of ad spend, followed by a lack of measurement and tracking.

56 per cent of respondents say that mobile is either a regular part of client proposals or a significant part of their business, which has grown from 33 per cent in 2012. Although 24 per cent of people said they still have no experience of working with mobile advertising, this has dropped from 40 per cent in 2012.

Targeting, NFC, location and tracking are seen as the most exciting developments in mobile advertising, while native made it onto the list for the first time. Mobile wallets and augmented reality have dropped of the industrys radar since last year.

Participants from some of the worlds biggest media agencies, including MEC, Starcom Mediavest, Havas, Mediacom and Manning Gottlieb OMD took part in the survey. The research was conducted in partnership with research agency Work.