Author: Mark Hoelzel

Mobile is growing faster than all other digital advertising formats in the US, as advertisers begin allocating dollars to catch the eyes of a growing class of “mobile-first” users.

Historically, there has been a big disparity between the amount of time people actually spend on their smartphones and tablets (significant and growing), and the amount of ad money spent on the medium (still tiny).

But BI Intelligence expects that this gap will narrow substantially, as enthusiasm grows for mobile-optimized ad formats (such as interactive rich media and native ads), as targeting improves, and as more and more advertisers learn how to effectively use the platform.

Recent data from BI Intelligence finds that US mobile ad spend will top nearly $42 billion in 2018, rising by a five-year compound annual growth rate (CAGR) of 43% from 2013.

The report looks at the most important mobile ad formats, including display, video, social, and search. The report provides exclusive breakdowns on how spend on each format will grow and why, and examines the overall performance of mobile ads. It also looks at how programmatic ad-buying tools, including real-time bidding, are reshaping mobile advertising.

Here are some of the key takeaways:

  • Display and video will be the fastest-growing mobile ad formats as digital ad dollars quickly shift from desktop to mobile, and ad products improve. US mobile display and mobile video ad revenues will grow at an astonishing CAGR of 96% and 73%, respectively, between 2013 and 2018.
  • But search and social media will still account for the largest share of US mobile ad revenue during the forecast period. Search is a strong format on mobile because of its convergence with local-mobile targeting.
  • Mobile programmatic ad revenues, including ads sold through real-time bidding (RTB), will account for 43% of US mobile display-related ad revenue in 2018, up from only a 6% share in 2013. But programmatic will still be limited by the lack of robust cookie-based targeting on mobile.
  • In-app mobile ads perform much better than mobile web ads, and ad spend will likely follow performance and usage. In-app click-through rates averaged 0.56% globally, compared to 0.23% for mobile web ads during the first half of the year, according to Medialets.

Check out the full article here.