Gartner: Mobile ads eating into traditional spend in Western Europe

Global mobile advertising spend is expected to rise by almost $5 billion (€3.6 billion) in 2014, with Western Europe expected to enjoy steady growth as more advertisers turn to the mobile channel.

According to the report from Gartner, global mobile ad spend will grow from $13.1 billion in 2013 to $18 billion in 2014, and hit $41.9 billion in 2017, the end of Gartner's forecast period. Display ad formats will generate the bulk of revenue in 2014, but video ads will see the highest growth year-on-year, the company added.

Stephanie Baghdassarian, research director at Gartner, said Western Europe's mobile advertising market is following a similar trend to North America, with a mature online advertising sector and high advertising budgets.

Baghdassarian predicted that mobile will become more integrated "into 360-degree advertising campaigns, eating up budget historically allocated to print and radio advertising".

Emerging markets including Eastern Europe and Middle East and Africa were tipped to grow through 2017, although Gartner said rises are dependent on technology adoption and economic stability. Growth in Asia Pacific will slow during the forecast period, because the region is the world's most mature mobile ads market.

Baghdassarian noted the pace of growth in other global markets is also likely to slow in the long term, "as the number of mobile web sites and applications increases faster than brands request ad space on mobile device screens".

Growth in the next three years "will be fuelled by improved market conditions, such as provider consolidation, measurement standardisation and new targeting technologies, along with a sustained interest in the mobile medium from advertisers," Baghdassarian added.

Gartner predicted that mobile display ads will remain the biggest category of mobile ads in the next three years, with mobile web display set to take over from in-app display ads as the primary sub-category. However, the company noted the shift to mobile web display had been stymied by HTML5, which has taken longer to impact the market than the company expected.

The research company also forecasted that tablets will drive growth in audio and video ads during the forecast period, and that better location-based services – particularly search functions from businesses including Foursquare and Pinterest - will grab the attention of local advertisers.

Juniper Research recently predicted that in-app mobile ad spending will hit $16.9 billion by 2018, with total mobile advertising spend of at least $39 billion at that point.

For more:
- see this Gartner release
- see this Juniper Research release

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