Mobile Ad Spending Boom on the Horizon, says Myers

By Fred Aun , September 18, 2007

Slow to catch on, mobile advertising is about to enter its heyday, according to the latest ad spending projection from The Jack Myers Media Business Report.

The forecaster believes advertisers are currently spending about $500 million annually on mobile advertising but will increase that amount by 120 percent next year and reach about $1.1 billion.

The spending won’t stop there, said report publisher Jack Myers. He estimates another 120 percent boost in mobile spending for 2009, meaning marketers will shell out about $2.4 billion to dangle their goods and services in front of mobile device users. According to his forecast, 2009 should be the year mobile advertising draws 1 percent of the $254 billion total ad spend.

“Mobile advertising, in 2005, was at virtually the same level as gaming advertising," said Myers in an interview. “It was growing at a fairly parallel rate with gaming.” However, if his projections prove correct, mobile ad spending will grow twice as fast as game ad spending in 2009.

While it will not come close to the growth rates of either mobile or game ad spending, general Internet advertising -- including search and video -- is still on the rise. Myers projects online spending to increase 20 percent, to $16.7 billion, this year. Similar growth rates should follow, according to Myers: Online/Internet should see 24 percent gains in 2008 and 28.5 percent growth in 2009.

He said video advertising will be the heavy hitter of the online advertising lineup. “Search growth is slowing, but everything to do with video is accelerating,” said Myers. While monetization of YouTube and other user-generated video is a hot topic these days, Myers said the big growth in online video ad spending will benefit large, commercial sites. “More the CBS, Disney professional type video,” he said.

While online advertising is growing, it still amounts to a small slice of overall marketing budgets. “In 2007, online represents 7.2 percent of total advertising and advertising represents 31 percent of total marketing,” said Myers. Noting that online represented only 5.3 percent of total advertising in 2005, Myers predicts it will have doubled to 10.5 percent by 2009.

Myers forecasts overall media advertising will increase 6.9 percent in 2008 and 3.1 percent in 2009, and his report notes categories untracked by some other forecasters, such as cinema, mobile, games, branded entertainment, satellite radio and custom publishing, are expected to collectively grow 20.3 percent this year, 18.4 percent in 2008 and 18.5 percent in 2009.

Meanwhile, Myers projects newspapers will sustain the largest declines in ad spending. He said the papers will lose 4.6 percent in ad revenues in 2007, 2.4 percent in 2008 and 4.5 percent in 2009.”