LONDON--(BUSINESS WIRE)--Technavio analysts forecast the global mobile ad spending market to grow at an impressive CAGR of around 10% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the global mobile ad spending market for 2016-2020. The report includes market segments, based on the type of mobile advertising, and a detailed discussion of the growth prospects and challenges of each segment during the forecast period. The market segments include search ads, display ads, and SMS marketing.
Mobile advertisements are not limited to browsers. Nearly 86% of the mobile users spend time on apps rather than browsing the web via mobile phones. Therefore, more and more developers are trying to integrate mobile ads with the apps.
Technavio media and entertainment analysts highlight the following three factors that are contributing to the growth of the global mobile ad spending market:
- Higher brand recalling capability
- Growth in in-app advertising
- Rapid growth in social media
Higher brand recalling capability
Online advertisements have a higher brand recalling capability when compared with the other digital advertisements such as television commercials. It involves better interaction with the audience since they are passive only to a limited extent, i.e., the audience has a choice to skip an advertisement, but after a small duration. This small duration, where the users are forced to see the ad, increases the interaction of online advertisements with the audience. On the contrary, the audience can skip television advertisements by either changing channels, switching off the television or simply avoid watching it.
Online advertisements are also shorter in duration than television ads and hence have a higher completion rate. Even when the ad does not provide the option of skipping the ad, the audience does not hesitate to view these ads as they are shorter, and well positioned within the videos or content. According to Technavio analysts, as of 2015, online advertisements had an average completion rate of more than 85%.
Moreover, not all the online advertisements are auto-played as viewers also watch online advertisements according to their interests. These viewers are usually interested in the product or service being advertised and thus results in a higher brand recall. “With increasing internet penetration across the globe and rapid technology advances, advertising agencies and ad services such as Google ad services are collecting an enormous amount of consumer data which allows them to display customized ads,” says Ujjwal Doshi, a lead analyst at Technavio for publishing and advertising research. For instance, if a user searches for “new automobile launches in 2016” on the web, they are likely to get more advertisements related to automobiles. This increases the brand recall capacity of online advertisement, thereby contributing to the growth of the online advertising market worldwide.
Growth in in-app advertising
The prevalence of smartphones and tablet devices has consequently increased the number of designated apps for websites and other online platforms. A staggering 85% of smartphone usage time is spent on apps as compared to a mere 15% on browsers.
Enhanced appearance and add-on features provided in apps have increased their adoption substantially. Pop-up, display, and scroll ads hosted on apps are appropriate and are generated based on the data collected from user's devices and their online behavior. These advertisements are being prominently adopted as they have higher sales conversion rates.
Rapid growth in social media
The average time spent on smartphones and tablets is approximately three hours in developed countries. An estimated 85% of this time devoted to mobile devices is on social media apps, and this number is rising in many developing countries. Pages of individuals or organizations can be advertised on a larger scale on social media, which increases the popularity of the brand. “Social media users share posts and updates hosted on brand pages on their network, which further increases brand acquaintance. Regular updates on social media help to acquire new customers and increases familiarity among existing customers,” says Ujjwal.
During 2013-2015, an estimated 32% of global customers that were acquainted about a brand on social media platforms made a purchase, which is approximately 50% in developed countries such as the US and the UK. This supports the fact that social media platforms enable organizations to reach a broader customer base, which in turn increases brand awareness and customer loyalty.
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