UK Mobile Ad Spend Rises 116 Per Cent in a Year

UK mobile advertising spend more than doubled in 2010 to £83m, a 116 per cent increase over the 2009 figure of £37.6m on a like-for-like basis (i.e. the results compare companies that submitted both in 2009 and 2010). This is the key finding of the third annual IAB (Internet Advertising Bureau) and PwC mobile study. 

Entertainment & Media has dominated mobile ad spend for the past couple of years, but the study finds that its dominance is reducing, as other advertisers – in particular financial services and telecom providers, and consumer good brands – see the opportunity the sector has to offer.

Mobile search spend almost tripled between 2009 and 2010, from £20.2m to £54.9m. Display advertising, in the form of banner ads, text links, and tenancies, experienced a rise of 62 per cent to £23.7m, from £14.6m in 2009. Spending on pre-and post-roll ads rocketed by 492 per cent to £1.1m, up from just £200,000 in 2009, showing that the rich media opportunities that smartphones offer are being taken advantage of by advertisers.

“This year’s research shows that traditional advertisers such as finance, telecoms and consumer goods are really starting to understand the opportunities that mobile, and only mobile, offers,” says Jon Mew, director of mobile and operations at the IAB. “Mobile advertising allows advertisers to target people on the move, and capture them when they’re most receptive. It’s an exciting time for mobile advertising, and for advertisers who use the opportunities.”

Anna Bartz, strategy manager at PwC, notes that the sector is witnessing patterns of growth similar to online advertising in its early stages. “Increasing technology packed into handsets, coupled with decreasing costs, presents brands with a tempting opportunity to target mobile consumers,” she says.

Only actual media spend is reported to ensure fair comparison to other media, including display advertising. Figures do not include SMS/MMS production and delivery costs, and other mobile marketing revenues like app production.

The IAB and KPMG have sliced and diced the figures in a multitude of ways, and included some historical data to provide context; we are happy to reproduce their analysis here…

Top display ad categories in 2010 – percentage share (2009 figure in brackets): 

  • Entertainment & Media – 32.9 per cent (61.5 per cent)
  • Finance – 18.6 per cent (8.1 per cent)
  • Telecoms – 14.3 per cent (14.7 per cent)
  • Consumer Goods – 11.8 per cent (3.2 per cent)
  • Automotive – 6.5 per cent (2.5 per cent)

Expenditure on mobile advertising formats in 2010 (2009 figure in brackets): 

  • Search – £54.9m (£20.2m)
  • Display – £28.1m (£17.4m)

Display breaks down as follows:

  • Banners and text links – £23.7m (£14.6m)
  • Tenancies – £1.7m (£1.4m)
  • Pre- and Post-roll ads – £1.1m (£0.2m)
  • Other formats, including display advertising within SMS/MMS – £1.6m (£1.2m)

Market shares:

  • Search – 66 per cent (54 per cent)
  • Display advertising (banners and text) – 29 per cent (39 per cent)
  • Other formats – 5 per cent (7 per cent)

Stats in context:

  • In 2008, the year records began, mobile phone advertising totalled £28.6m
  • In 2009 mobile ad spend increased 32 per cent year-on-year to £37.6m
  • In December 2010, UK Smartphone ownership was up 58 per cent year-on-year to 36 per cent of the UK (source: comScore)
  • In December 2010, there were 23.3m mobile users in the UK, a 21 per cent year-on-year  increase for the 3-month average to the end of December 2010 (source: comScore)
  • In December 2010, 6.3bn minutes were spent browsing the mobile internet (source: comScore/ GSMA)
  • The number of minutes spent online per user, per month went up 32 per cent during 2010 to 301 minutes per person (source: comScore/GSMA)
  • Mobile media users pick up their phone 18 times a day to consume content via apps or the browser. (source: Mobile in the Media Day, IAB Research Jan 2011)
  • 40 per cent of mobile media users agree they often use their mobile if they see an interesting ad (Mobile in the Media Day, IAB Research Jan 2011)
  • 51 per cent of the UK population has engaged in mCommerce (IAB Consumer M-Commerce Study, Oct 2010)

David Murphy writes:
116 per cent year-on-year growth looks, at first glance, impressive, as indeed it is. But perhaps the most impressive thing about the stat is that to anyone who is either involved in, or follows, the mobile marketing business, it’s not really that much of a shock.

Advertisers, as everyone knows, go where the eyeballs are, and as more people browse mobile websites – partly because the experience is now almost enjoyable, and partly because there are so many more mobile-optimised sites to look at – and as more and more people download free, ad-funded apps, there’s an inevitability about the rise and rise of mobile advertising. One that, seemingly, brands can no longer ignore.

What I’d be intrerested to know is how the attitude of the creative types in ad agencies – the ones who do the big, prime-time TV ad campaigns – is changing, if indeed it is. There’s a part of me that could half-understand their slightly sneery attitude towards a medium where they only had one fifth of a small-to-start-with mobile phone screen to play with (though surely, therein lies the challenge), but when you see things like InMobi’s 3D ad format, demoed to me on an iPad at Mobile World Congress, you realise that these days, mobile is a very broad church indeed.

One thing seems assured; if you think the 116 per cent year-on-year increase in mobile ad spend reported today is impressive, wait till you see next year’s figure.

David Murphy