Mobile Ad Budgets More than Double From 2011: IAB Study

Nearly a Third of Marketers Expect to Spend More than $300K on Mobile This Year

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Marketers are spending more than twice as much on mobile this year than in 2011 as they work to close the gap between how much of their budgets is allocated to mobile and how much media is consumed on such devices, according to a new Interactive Advertising Bureau survey.

Among the 300 U.S. organizations surveyed, IAB estimated the average mobile ad budget was $242,750 in 2013, more than double the budget two years ago.

"It's a very nice confirmation that the mobile landscape has changed for the better in the eyes of marketers," Joe Laszlo, the IAB's senior director for its Mobile Marketing Center of Excellence. "The obstacles are less threatening than they were two years ago."

The percentage of marketers spending more than $300,000 on mobile advertising more than quadrupled from two years ago. When the IAB conducted the same study in 2011, 7% of respondents reported having mobile budgets that high. This year, nearly a third (32%) said they were spending north of $300,000 on mobile.

The $300,000 mobile ad budget club is likely to keep growing. Nearly three-quarters (74%) of the respondents this year said they planned to increase mobile ad spending over the next two years. In 2011, 72% said they anticipated mobile ad budget increases.

U.S. adults spend two hours and 21 minutes per day on mobile media, an increase from one hour and 35 minutes in 2012 and just 48 minutes in 2011, according to a July 2013 study from research firm eMarketer. Overall, mobile accounts for just less than 20% of consumers' media consumption.

Mobile marketing still faces significant hurdles, though. In particular, respondents said device and operating system fragmentation, privacy concerns, a lack of standardized metrics and a lack of agency expertise were the biggest challenges for mobile advertising.

Mr. Laszlo said marketers have shown increased interest in HTML5 and responsive web design as a possible remedy to the problems with serving ads across different devices, operating systems and web browsers.

Marketers' increasing interest in mobile advertising combined with slowing smartphone sales may also close the gap between the smartphone users and mobile ad budgets.

"The pace [of mobile ad growth] is certainly outpacing the growth of smartphone adoption because smartphone adoption is already quite high," Mr. Laszlo. "I think we'll see smartphone penetration to continue to grow as we see lower costs smartphones enter the market."

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