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Mobile-Ad Revenue Explodes, Finally

Set to More Than Double, While Desktop-Ad Spending Rises an Anemic 1.7%

By Published on . 3

Mobile advertising is finally hitting its tipping point.

According to a report from eMarketer to be released this week, mobile-advertising spending is set to double to $9.6 billion this year and leap another $5 billion in 2014.

In fact, eMarketer estimates that nearly all digital-advertising growth this year will come from mobile. That's a watershed for a sector that has long been the George Bailey of the digital-ad world -- forever poised to break out, but never quite making it.

Mobile-ad spending, in fact, will more than double in 2013, eMarketer said, compared to an anemic 1.7% rise for desktop-ad spending. With digital-ad spending as a whole set to grow 15.7% this year, mobile is clearly the driver.

So what's changed? First, mobile is starting to overtake laptop and PC usage. An August eMarketer report found that U.S. adults are spending 19.4% of their time on mobile devices, compared with 19.2% on laptops and PCs.

Secondly, advances in infrastructure have helped. "Many advertisers weren't ready in 2011 or 2012 to make big mobile-ad buys. The infrastructure wasn't necessarily there -- poor mobile web and app experiences were rampant, particularly among retailers. But that's changed as more brands and retailers invested heavily in smartphone and tablet experiences this past year," said eMarketer VP Clark Fredricksen. Other drivers include the surging growth of mobile commerce and ad sellers like Google and Facebook "finally developing mobile-ad experiences that advertisers are comfortable with," he said.

That's not to say mobile's growth will be evenly distributed. According to Mr. Fredricksen, the companies that stand to benefit the most -- at least for now -- are those that can effectively sell advertising across devices, with the advantage going to digital giants like Facebook and Google. Traditional media, which has been slow to adapt to mobile, could have a tougher time.

But advertisers appear ready to pony up for mobile ads, which should eventually lead to gains across the board. "Longer term," Mr. Fredricksen said, "we expect that as other publishers continue to make investments in mobile, both in user acquisition and ad products, they'll catch up."

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