10 Comments

Summary:

Though mobile advertising is growing fast, it’s not yet keeping up with the growth of mobile usage. $3.8 billion will be spent on the U.S. mobile web in 2010, up from $2.6 billion in 2009, but a whole lot less than $25 billion in online advertising.

Though mobile advertising is growing fast, it’s not yet keeping up with the growth of mobile usage. Imran Khan of J.P. Morgan estimated today that $3.8 billion will be spent on the U.S. mobile web in 2010, up from $2.6 billion in 2009, but a whole lot less than the $25 billion in total U.S. online advertising for the year.

Khan thinks mobile will follow a similar pattern as the web, where usage outpaced revenue until an inflection point at 30 percent broadband penetration. But the problem is, mobile Internet is growing even faster than desktop Internet, as the Morgan Stanley analyst Mary Meeker has detailed. Today 60 million Americans are actively using mobile Internet service.

The J.P. Morgan report (PDF) comes on the eve of Apple’s release of iAd, the mobile app advertising platform that was formidable enough on spec alone for the FTC to drop its antitrust investigation of Google buying AdMob. iAd is set to ship with the new iPhone OS 4.

For now, the vast majority of mobile advertising — $3.2 billion, or 85 percent — comes from SMS, which has the advantage of being accessible on nearly every phone. However, while mobile subscriber growth is growing, smartphone growth is zooming — Nielsen said today U.S. smartphone penetration is now at 23 percent.

Khan projects mobile display advertising to grow rapidly, up to $253 million in 2010, though he projected traditional Internet display ad providers should soon start to edge out mobile specialists like Third Screen Media and AdMob, since web pages viewed in good mobile browsers don’t require custom ads.

Lastly, J.P. Morgan identified mobile search advertising, including both search results pages and voice lookups, as another high growth area, hitting $321 million in 2010. While display CPMs should go down over time as inventory increases, the firm thinks search CPCs will grow.

Of course, Steve Jobs is betting on a different scenario for the future for both display and search; Apple’s iAd a solution explicitly targets native mobile apps, with each ad being essentially a rich HTML 5 app-within-an-app. Jobs has contended that mobile experiences are much more oriented to apps than search.

Related content from GigaOM Pro (sub req’d):

You’re subscribed! If you like, you can update your settings

By Liz Gannes

You're subscribed! If you like, you can update your settings

Related stories

  1. Impulse Magazine Friday, June 4, 2010

    I think that this number will ony double in the years to come

  2. 2010美国移动广告市场数据 Sunday, June 6, 2010

    [...] 英文地址:http://gigaom.com/2010/06/04/3-8b-on-mobile-ads-this-year-cant-keep-up-with-usage/ [...]

  3. Apple Aims for Mobile Ad, Google Dominance With iPhone 4 – Diane Mermigas – The Next Five Years – True/Slant Monday, June 7, 2010

    [...] mobile Web advertising is expected to reach $3.8 billion this year, according to JP Morgan analyst Imran Khan, which is well below his forecast of nearly $25 billion, [...]

  4. » Blog Archive Monday, June 7, 2010

    [...] mobile Web advertising is expected to reach $3.8 billion this year, according to JP Morgan analyst Imran Khan, which is well below his forecast of nearly $25 billion, [...]

  5. John Di Domenico Tuesday, June 8, 2010

    Mobile is def growing and should part of every marketers strategy.

  6. It’s time for everyday innovation : Headlight: The Digital Automotive Blog Wednesday, June 9, 2010

    [...] According to Kantar Media, U.S. ad spending was more than $125 billion in 2009. With only $3.8 billion spent on mobile ads, per JP Morgan, and a mere $1.6 billion spent on online video, per Piper Jaffray & Co., it’s [...]

  7. Finance Geek » Mary Meeker internet trends – the mobile opportunity will eclipse what we have seen before Thursday, June 24, 2010

    [...] $3.8B on Mobile Ads This Year Can’t Keep Up With Usage (gigaom.com) [...]

  8. In Hot Ad Market, Traditional Firms Make Buys « Updata Advisors – IT M&A Research, News and More Monday, June 28, 2010

    [...] total online advertising is expected to reach $25 billion for the U.S. in 2010, estimates show only $3.8 billion will be spent on the U.S. mobile web (up from $2.6 billion in 2009). The growth year over year, as well as the large disparity between [...]

  9. iAd Approval Process Pains Sound Familiar Monday, August 16, 2010

    [...] on iOS, mobile is not their top priority; mobile display advertising is only supposed to be worth $253 million in 2010, of an estimated total $3.2 billion for mobile advertising platforms [...]

  10. Android Has Facetime: App Attention and Ads: Tech News « Monday, October 25, 2010

    [...] ads, so there’s proof enough that ad-supported apps can become a secondary revenue stream. And with $3.8 billion expected to be spent on mobile ads this year, it’s a difficult opportunity to ignore. As a result, Apple purchased mobile add firm Quattro [...]

Comments have been disabled for this post