Mobile advertising by the numbers: 2012 will be the tipping point

Gartner predicts that mobile advertising revenue will hit $3.3 billion in 2011. While North America and Europe will show strong growth, they will still only account for a quarter of the market between now and 2015, when, says Gartner the market will be worth $20.6 billion.

The powerhouse is Asia, says Mobile Squared in another report supported by Smaarto the mobile ad optimization company. Mobile advertising will represent 4 percent of advertising revenue in the region by the end of 2011, twice the figure for North America and Europe. Almost inevitably, China, with 17 percent of the market, is beginning to drive the growth, taking over from Japan as the engine room for mobile advertising. This is perhaps not surprising, given the sheer scale of mobile Internet take up there.

Working in the context of a U.S. total population of under 400 million people, China has that number of smartphone users, and Asia as a whole will have a staggering 671 million mobile Internet users by the end of 2011, according to the Mobile Squared report. China will have added approximately 160 million smartphone users since 2010, driving revenues in 2011 of $473 million.

According to the report, the average spend on a mobile advertising campaign in the US last year was between $70,000 and $100,000, allowing creative agencies to finally get to grips properly with the medium. Meanwhile, news feeds are bulging with statistics, cool applications are a daily discovery and big brands are getting involved in this market, currently dominated by search based adverts.

That 2012 will be the ‘tipping point’ as Chris Lane, author of the Smaarto white papers believes, is backed up by a number of recent news pieces.

Google recently announced that its mobile advertising business is on track to generate $2.5 billion (CP: Advertising continues to fuel Google growth – click here for mobile model growth)– and they do not yet have a good hold in China.

Facebook meanwhile expects their next billion users to come primarily via mobile, according to the company’s VP for partnerships and corporate development Vaughan Smith at the GSMA Mobile Asia Congress in Hong Kong this week. eBay, meanwhile, expects $5 billion from mobile sales in 2011.

Big brands are also taking notice. Audi’s UK digital marketing manager, Hugh Fletcher, says that smartphones generated 7.5 percent of the manufacturer’s online traffic, with tablets accounting for 10.5 percent. Although there was nervousness that mobile could deliver a premium experience, it is clear that this is changing. As mobile handsets become the default browsing device, Audi will move advertising dollars to the platform, says Fletcher.

Finally, and encouragingly, leading edge telcos are now in the game, with the announcement that telco giant Telenor's Android users will be able to access a carefully selected and continuously updated array of apps inside a fixed destination on the front page of Android Market. This is to be available in all 11 of Telenor’s markets – and, of course, will enhance customer experience, the eco-system and revenues for Telenor because Google is in favor of carrier billing.