According to Strategy Analytics, a global research and consulting firm, 2011 was the first year that global consumer spending on mobile media content, apps and services for smartphones reached a milestone of $100 billion.
“Advertisers chase eyeballs so the fact that brands spend more on in-app advertising than the mobile web is a clear sign that apps are what consumers are glued to for an increasing range of activities,” said David MacQueen, Strategy Analytics’ Director of Wireless Media Strategies. “In the eyes of many advertisers, web browsing on a smartphone is playing second fiddle to the app economy.”
The Global Mobile Media Forecast from Strategy Analytics also found that consumers are expected to increase spending on mobile media by 13.4 percent or $121.8 billion in 2011 to $138.2 billion in 2012. For advertisers, mobile marketing is expected to double from $6.3 billion in 2011 to $11.6 billion in 2012. As a result, the total mobile media economy will reach almost $150 billion in revenue in 2012, says Strategy Analytics.
Among the top mobile media categories, music will still account for $16 billion or 11.6 percent of 2012 consumer spending. However, the way consumers access and pay for music will change. Ringtones are declining fast, but streaming music services such as Spotify, Pandora and Deezer – paid for by subscription or through advertising – are gaining good traction in Western Europe and the U.S.
Similar to the popular mobile apps, video usage on mobile phones has increased to over 100 billion viewers in 2011 and is projected to reach almost 300 billion in 2012. But despite a 23.8 percent revenue growth, video is likely to account for a mere 2.4 percent or $3.6 billion of total mobile media revenues in 2012, says Strategy Analytics.
“Low revenues are down due to many major mobile video services being free to the end user, either funded by advertising such as YouTube or bundled without additional cost by pay TV providers, such as Sky Go around Europe or AT&T U-verse in the U.S.,” said MacQueen. “While ad revenues will more than triple to $726 million in 2012, it is still clearly challenging for advertisers looking to reach consumers through video ads on smartphones.”
In the U.S., the mobile media economy is expected to outperform the global market by 22.1 percent or over $30 billion in 2012. U.S. consumers are expected to spend $6.7 billion on mobile apps in 2012, a 24.6 percent increase than 2011. And advertisers will likely tap into this expected growth by spending more than double on marketing than their global counterparts. U.S. advertisers are expected to spend over $4 billion on mobile marketing in 2012, says Strategy Analytics.