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Web firms drool as ballgazer spies $11bn mobile ad spend in 2013

Gartner forecasts cash bonanza

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Web giants, telcos, media companies and a host of mobile start-ups will be salivating over today's Gartner forecast that predicts a heady doubling of global mobile advertising spend in the next three years.

Mobile advertising revenue worldwide will rise 16 per cent in 2013, from $9.6bn in 2012 to $11.2bn in 2013, predicts the report. This figure will hike to $24.5bn in 2016, say the biz-watchers.

The flood of money will create new opportunities, said Gartner research director Stephanie Baghdassarian - in particular for app developers, ad networks and the mobile platform providers such as Google. And after the revelation from French telco France Télécom-Orange that it gets cash for delivering Google content to mobile users, there must b e plenty of telcos hoping that the wealth could wash across the sector.

Businesses that will be less pleased at these results include local newspapers - Gartner predicts that much of the money going to mobile ad spend will have been drained out of the local paper market.

A big growth in apps has fuelled the rise of display advertising in the past year, pushing it beyond smarter search advertising - including location based advertising on maps - a trend that Gartner predicts will continue.

Of course people do search for stuff when they are out and about but there has been a big increase in use of applications and many are supported by advertising. A lot of games you get for free show adverts at the top and bottom of the screen. And that where the growth in impressions comes from.

As mobile consumption shifts away from apps towards the mobile browser over the next few years, the ad spend may switch to mobile web ads rather than in-app commercials. How well they work is another matter:

The efficiency and follow-up of the advert is a different question, but the volume has increased. Search-based adverts are growing too, but that is a linear growth.

She added that the big increase in tablet use - Gartner folds tablets into its mobile statistics - means that mobile devices are more likely to be used to consume content, than used actively as search devices.

More glamourous techie forms of mobile advertising such as Augmented Reality would see growth too, said Baghdassarian.

One word of warning though: the boom in mobile has seen a big increase in volume of ad inventory available but to date there are more ad slots than there are ad dollars to pay for them. That means that though the flow of money into the sector will accelerate, there may have to be a readjustment of prices at some point. ®

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