Saturday, October 27, 2012

U.S. Mobile Ad Spending will Reach $2.61 Billion


According to the latest market study by eMarketer, time spent using mobile devices for activities such as internet (web) and application (app) use, gaming, music and others has more than doubled in the past two years.

This year, the amount of time people in the U.S. market spent using mobile devices -- excluding talk time -- will grow 51.9 percent to an average 82 minutes per day, that's up from just 34 minutes in 2010.

Mobile growth comes as time spent online, which includes desktop and laptop computers and other non-mobile connected devices such as internet-connected TVs, will continue rising but at a slowed pace from previous years.

eMarketer estimates time spent online in 2012 will grow just 3.6 percent to an average 173 minutes per day -- that's compared to 7.7 percent growth in 2011 to 167 minutes per day.

Since online already accounts for an average of nearly 3 hours of time spent with digital media each day, double-digit growth rates are unlikely -- even as Americans do more activities and spend more time with their computers.

Mobile, by contrast, is growing quickly from a small base -- and growth in time spent is also being boosted by fast uptake of smartphones and media tablets, which have still penetrated only a minority of all consumers.

As more Americans continue to acquire these portable devices, mobile is grabbing an ever-greater share of time with all media -- potentially at the expense of traditional online usage growth.

This shift has been problematic for some publishers who have not seen their advertising revenue follow the trend. The share of ad spend on the web is still playing catch-up, and it's even further behind on mobile -- which will see just 1.6 percent of U.S. ad spending this year.

Moreover, American adults will spend an average of 11.7 percent of their online media time with their smartphones and tablets.

While mobile advertising is expected to grow rapidly in the next few years -- eMarketer estimates that overall U.S. mobile advertising spending will reach $2.61 billion this year before rising to nearly $12 billion in 2016 -- there are some significant barriers that both marketers and advertising publishers will have to overcome before mobile ad spending will achieve parity with the share of time spent by people on mobile devices.

eMarketer bases its estimates of time spent with media on an analysis of estimates from other research firms, consumer media consumption and device adoption trends.

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