Revenues still lag internet advertising, but mobile is growing much faster
Canadian advertisers are increasingly on the go.
New data released today by the Interactive Advertising Bureau of Canada (IAB) shows that mobile advertising revenues – which include both ad placements and production-only app development spending – grew 93% to $52 million in 2010, and are projected to reach $82 million this year.
The IAB divides mobiles revenues into two categories to assess ad spend as per other media while simultaneously tracking the burgeoning app development industry, which grew 49% in 2010.
Ad placement accounted for the vast majority (approximately 90%) of mobile ad spending, with 2010 revenues increasing 105% to $46.6 million. Mobile search (up 154% to $17.1 million), mobile display/sponsorship (up 206% to $15.6 million) and mobile messaging (up 17% to $12.5 million) led the category growth.
According to IAB president Paula Gignac, mobile ad growth is being driven by a number of factors: the increased ubiquity of mobile devices (“everybody has one, some of us have two”); Canadians’ willingness to complete online transactions (“there’s already millions of dollars in e-commerce flowing through the mobile phone”), the ability to deliver location-specific advertising and the fact that the device is always on and always being carried by the target audience.
According to Gignac, the mobile sector is also growing faster than the internet because advertisers are increasingly willing to adopt new digital ad formats. “With the internet, there were several years where the growth was smaller than it should have been because people just didn’t understand that it was going to be a big thing,” she said. “People really understand that digital is very important now, so mobile is benefiting from that.”
She pointed to the consumer packaged goods category (CPG) as an example of how advertisers are embracing new digital advertising channels. CPG accounted for more than one fifth (22%) of all mobile advertising revenues in 2010, double its 11% of web advertising revenues. CPG is followed by the retail, telecom and automotive sectors at 12%, 12% and 11% respectively.
Although internet ad revenues currently dwarf those of mobile ($2.32 billion versus $52 million), the latter grew four times faster in 2010 (105% versus 23%) and shows no signs of slowing. “Mobile’s got so much longer to go to get to being that mature medium,” said Gignac. “It’s going to grow dramatically over the next five years, and we’re going to see some real dollars spent there.”
Gignac noted that mobile advertising still has some key hurdles to clear, including measurement, standardizing ad formats and addressing privacy concerns.
“There’s a lot more work to be done in this format right now, but there are a lot of ways that companies who have done advertising on the internet can very easily enter into this channel,” she said.
The top 10 earners in IAB Canada’s Mobile Advertising Revenue Survey accounted for 82% of total net revenues last year. Revenue concentration among the top 10 earners has remained stable over the past three years, ranging from 79% in 2008 to 82% in 2009.
The data does not include any revenues for the nascent tablet category, which didn’t formally debut in Canada until May 2010 with the first revenue-generating apps not developed until September.
