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Forrester: Mobile social ad spend to reach $4.5bn by 2018

8th Apr 2013
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Mobile ad spend on social networks is set to rocket. According to new figures from Forrester, $4.5 billion will be spent by 2018 – double the amount forecasted to be spent on social network desktop ads.

Analyst Jitender Miglani explains that Forrester’s latest Social Media Forecast, 2013 To 2018 report for the US considers not just the three top social networking sites but the top 20. His report, examines unique monthly visitors, time spent on each site, which are most important for marketers and mobile access and ad spend.

In particular, he focused on what will drive growth and pinpointed mobile as being a key driver for social media spending, because:

More users are accessing social networking sites through mobile: As per our forecast, we expect the number of US social media users accessing social networking sites via mobile to exceed 200 million by 2018. Nearly one-fourth of them will be mobile-only social media users; the rest will access social networking sites via both PC and mobile.

The share of time spent on mobile social networking apps continues to increase: Social media apps are among the top apps that smartphone users use. The amount of time they spend on these apps continues to increase.  

Mobile ads provide a better return on investment (ROI) for marketers: Several studies have shown that the click-through rates (CTRs) for mobile ads on social networks is much higher than for desktop ads. Mobile ads provide a better ROI for marketers.

Mobile ads earn more money for social media vendors than desktop ads: Studies have shown that native ads — ad units targeted according to social signals such as relationships, likes, and retweets — are more engaging than standard ads. Native ads are popular on mobile because of the limited screen size. The native ads on mobile earn more money for vendors than native or standard ads on desktops, either on a cost per click (CPC) or a cost per thousand impressions (CPM) basis.

The overall mobile ad ecosystem will evolve: Mobile ads on social networks are much newer than online display or search ads. Online display ads have been around for nearly 20 years, while online search ads have been around for more than 10 years. While the online advertising ecosystem (comprising ad networks, ad exchanges, demand-side platforms, sell-side platforms, data management platforms, etc.) is somewhat mature for display and search, it will evolve for mobile social over the next five years. 

“We believe that the future of social is mobile,” he concludes.

M&C Saatchi also recently forecasted that mobile advertising, specifically real-time bidding, is set to accelerate. Whilst real-time ad serving is still relatively new in mobile, the mobile marketing agency claimed that its proliferation will be faster and exceed its original uptake in the fixed online world.

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