The rapid growth in mobile advertising expenditure is set to slow significantly over the next five-years, according to Strategy Analytics.
After growing over six-fold between 2013 and 2018, growth in mobile advertising revenue will fall to a 12% CAGR and the market value will reach $222 billion in 2023.
In short, while the mobile share of digital advertising will grow rapidly in less developed advertising markets, in advanced markets the share over mobile is reaching a plateau.
Strategy Analytics expects mobile advertising to continue to suffer from headwinds including increased cautiousness following Facebooks Cambridge Analytica scandal and the implementation of GDPR.
Other key findings include:-
- Mobile advertising will rise from to 67% in 2023. In markets where multi-device use is high, like the U.S., mobile advertising will account for just 58% of all digital in 2023, while in mobile-centric markets like India it will reach 71%.
- Asia-Pacific is leading the mobile transition, representing around 44% of global mobile ad spend across the period. At a country-level and in terms of absolute ad spend, the U.S., and mobile-first markets China and Japan will remain leaders although their positions will erode.
- Search will remain the dominant mobile advertising format with 47% of ad spend across the period while mobile video ad spend will be the fastest growing (+16.5% CAGR over 2018-2023) driven by the adoption of 6-second mid-rolls, and vertical ad formats by industry leaders Snapchat, Facebook and more recently YouTube.
Brice Longnos, Analyst Wireless Media at Strategy Analytics, said: “Growth of mobile advertising in developed markets, where the largest brands and advertisers can be found, is slowing down as mobile competes with other screens for eyeballs, such as connected televisions. Meanwhile, in emerging mobile-first markets, mobile phones may be the primary screen for content consumption but ad budgets are lower. Therefore, the contribution to global mobile ad spend from those markets will be marginal.
“Furthermore, the progression of programmatic in display and video advertising will make ad spend more cost-efficient, increasing impressions and engagement per dollar spent. These three factors explain why we see mobile advertising expenditures slowing from 2018 onwards.”
Nitesh Patel, Director Wireless Media, added: “With mobile accounting a dominant share of revenues for leading social networks Facebook, Snapchat and Twitter in Europe, the restrictions imposed on customer data collection will be particularly felt as advertisers and publishers figure out the best approach for delivering targeted advertising while complying with regulation. In the long run, we expect advertisers to benefit as consumers giving consent will be more receptive and engaged with ad experiences.”