Mobile Advertising Growing, But Revenues Still Modest

Mobile advertising will continue to be a modestly-sized segment of the digital media ecosystem as long as different segments of marketers have alternative media vehicles which better meet their business objectives, say researchers at MagnaGlobal. But mobile commerce and mobile marketing are destined to grow.

Global online advertising will rise by 12.4 percent in constant currency terms during 2010, to $61 billion dollars globally. Accounting for actual and expected changes in currencies over the course of 2009 and 2010, online advertising will grow during 2010 by 13 percent in U.S. dollar terms or by 21 percent in Euros.

Paid Search has quickly become the most important component of online advertising, and in 2010 this segment will account for nearly $30 billion, up by 16.5 percent over 2009 totals on a constant currency basis, and about 49 percent of total revenues.

Google is the global leader in paid search, but in the paid search markets of China and Russia, the leading paid search providers are domestic players Baidu and Yandex.

All other online advertising will account for $31 billion, up by 8.7 percent in constant currency terms.

Advertising networks retain their importance to advertisers given their ability to aggregate and monetize vast quantities of inventory in an inexpensive manner. Social networking sites such as Facebook capture a large and growing share of audience time.

These trends should continue over the next five years, and the report expects online advertising to collectively grow by 11.7 percent in 2011 and by an average rate of 11 percent through 2015. At this time the global industry will generate $103 billion dollars in constant dollars.

The ongoing global economic recovery has contributed some modest uplift to the expectations of growth, but secular factors are the primary cause of this rapid and sustained pace of development. Importantly, says the study, industry growth is not directly caused by increasing numbers of consumers online nor by rising levels of time spent online.

Instead, growth is driven by businesses, many of them small, that find online media to be the single most effective platform to accomplish their business goals.