As the world increasingly goes mobile, it’s prompting a boom in mobile advertising, which is heating up and is poised for a huge year in 2012. The winners include companies such as Nexage, a real-time bidding exchange provider which told me that it hit 100 billion ads requested today through its platform.
Nexage launched three years ago and slowly built up its business before having a break-out year in 2011, when it started hitting a run rate of more than 10 billion ads served a month. It’s a nice milestone for a company that has been at the forefront of bringing real-time bidding to mobile advertising. And it shows how RTB auctions are becoming an important tool for advertisers looking to target consumers.
Ernie Cormier, Nexage’s CEO, said real-time bidding on mobile is different than online, where it’s used to unload a lot of impressions. Because mobile doesn’t support the kind of buy-side data produced through cookies, advertisers turn to publishers and exchanges to get information on users such as location, age and demographics. And with real-time auctions, advertisers can purchase the impressions they want, when they want them.
“We believe the future of exchanges is bigger in mobile than online because it’s not a place where impressions go to die,” Cormier said. “We believe RTB is critical to the growth of mobile and enables lot of things in mobile that couldn’t be possible otherwise.”
Nexage’s growth isn’t as gaudy as some other big mobile advertising names like Millennial Media, which serves up 40 billion ad impressions per month and recently filed to go public. But with its real-time bidding and mediation platform and its new private exchange, Nexage is providing valuable tools that show how the mobile advertising space is maturing and following the path of online. And now we’re starting to see advertisers increasingly look at mobile advertising as a way to reach consumers, who are rushing to mobile.
EMarketer last month upped its forecast for U.S. mobile ad spending this year to $2.6 billion from a previous estimate of $1.8 billion. It said that U.S. mobile ad spending hit $1.4 billion last year, ahead of a previous forecast of $1.2 billion. EMarketer now expects mobile ad spending to reach $10.8 billion by 2016.
That still trails online advertising, which is expected to bring in $39.5 billion this year in the U.S. But as we’re seeing, consumers are spending more and more time on mobile devices and brands are seeing big increases in engagement through smartphones and tablets. That’s going to prompt a big shift in marketing dollars as advertisers take advantage of mobile more and more.
“All of these patterns are pointing to a lot more mobile usage and engagement and interaction,” Cormier said. “You know that advertisers will follow the audience, it’s just a matter of working out the mechanics and getting players in the ecosystem with the tools they need.”