Tuesday, September 24, 2013
New IAB Study of 300 Brand Marketers Shows Striking 142% Uptick in Mobile Advertising Budgets Between 2011 and 2013

The Number of Big Mobile Budgets Soared More Than Fourfold

One in Five Marketers Expect To Increase Their Mobile Spend More Than 50% Over Next Two Years

NEW YORK, NY (September 24, 2013) — Brand marketer mobile budgets surged 142 percent between 2011 and 2013, according to Interactive Advertising Bureau (IAB) analysis of figures released today in a new IAB study, produced by Ovum, which updates the landmark “Marketer Perceptions of Mobile Advertising” survey of 2011. This finding supports the prior study’s prediction that brand marketers’ mobile advertising budgets were on the uptick. In addition, the survey showed that the number of marketers who maintained annual mobile budgets exceeding $300,000 more than quadrupled, rising from merely 7 percent in 2011 to 32 percent this year.

According to the 2013 “Marketer Perceptions of Mobile Advertising” (iab.net/ovumstudy) study of 300 top-level brand marketing executives, all of whom are currently using mobile in their media mix, nearly three-quarters (74%) expect that their companies’ mobile advertising spend will increase in the next two years – a similar number to those who anticipated an increase in the two years following the 2011 survey (72%). Moreover, building upon this broad intent to boost mobile spend, almost one in five respondents (19%) to the 2013 survey predict that their mobile budgets will increase by more than 50 percent in the next two years.

Respondents to the survey were also asked to rank the top developments in mobile advertising. Taking the lead were responsive design, HTML5 and mobile native advertising. More than two in three (67%) cited the IAB Mobile Rising Stars ad units as a key driver in the space.

“Over the past two years, the IAB Internet Advertising Revenue Report has shown an impressive rise in mobile spend and this study establishes that marketers expect more vigorous growth to come,” said Anna Bager, Vice President and General Manager, Mobile Marketing Center of Excellence, IAB. “These findings reaffirm that publishers need to make mobile a top priority in order to take advantage of strong brand marketer demand. In addition, it is a signal to all of us at IAB that we must continue initiatives, such as our HTML5 guidance for digital advertising, to fuel the mobile arena.”

As with the 2011 study, the 2013 survey asked marketers about the key challenges facing mobile advertising. The results clearly demonstrate that while hurdles remain, greater marketer experience and ongoing industry efforts have allowed the earlier urgency to abate. For example, a highly important challenge in 2011 was privacy issues, named by 40 percent of marketers. Surveying marketers in 2013, a year in which the Digital Advertising Alliance released mobile privacy guidelines, that number nearly halved to 22 percent. Back in 2011, 39 percent of respondents said that device/operating system fragmentation was of high concern. Only 23 percent say the same today. In addition, progress has evidently been made in the area of standard mobile metrics, as 31 percent of marketers cited it as a highly important challenge in 2011, with only 13 percent noting it in 2013.

“Mobile has been an integral part of 1-800-Flowers.com marketing strategy for several years, as consumers have embraced mobile phones as a crucial part of their day-to-day lives,” said Amit Shah, Vice President of Online, Mobile and Social, 1-800-Flowers.com. “In reviewing this study, we are delighted to see our approach to mobile aligns with the industry’s consensus that it is a powerful channel for effectively reaching target audiences when and where they are most likely to respond to our brand messages.”

In addition to comparing and contrasting against the 2011 findings, this year’s “Marketer Perspectives on Mobile Advertising” spotlights differences between marketers’ perceptions about mobile from the B2C and B2B sides of the fence:

  • 41% of B2B marketers rate mobile as still “experimental” as compared to only 27% of B2C
  • B2B marketers are far less likely to be looking at feature phones as part of their mobile efforts, with 45% saying that those devices are “not a priority” as compared to 19% of B2C marketers
  • B2C marketers are generally more satisfied with their mobile efforts than their B2B counterparts (70% vs. 50%)


The 2013 “Marketer Perspectives on Mobile Advertising” survey and analysis were released today during the annual IAB MIXX Conference & Expo in New York City. To review the entire 2013 study, visit iab.net/ovumstudy, and the 2011 survey is also available here iab.net/CMO_Mobile.
 

Methodology

Ovum conducted two wide-ranging, detailed surveys of the mobile advertising market as seen by marketers active in this area. The first survey was carried out in 2011 and followed by second iteration in 2013, enabling the IAB Mobile Center to show how attitudes towards and use of mobile advertising is trending and changing over time.

The 2013 survey is based on a quantitative primary research program with 300 US organizations that use mobile advertising. The sample included an even mix of companies in terms of revenue size, and with a balanced split across Business-to-Business (B2B) and Business-to-Consumer (B2C) companies.

The survey only included companies active in mobile advertising and respondents to the questionnaire were marketing executives with either:

  • Final decision making authority for some or all of our mobile marketing requirements
  • Influence some or all mobile marketing decisions

IAB used the survey data on mobile ad budgets in 2011 and 2013 to estimate an average marketer budget for each of those years.  For each spending range, we assumed a normal distribution and took an average.  At the high end, we made conservative assumptions about average spending levels and applied those consistently for 2011 and 2013.  This model yielded an average mobile ad budget of $100,125 in 2011 and $242,750 in 2013, a 142% growth rate for the 2-year-period.

About Ovum

Ovum was founded in 1986 and has its HQ in the UK, with further offices in France, Germany, US, China, UAE, Taiwan, Japan, Australia, and South Africa. Ovum is comprised of two core business areas: consultancy along with research and analysis (R&A) teams. R&A is organized around key practices that together cover the whole of the telecoms, media and IT value chains. We have a team of 150 media, telecoms and IT analysts and consultants, with 30% of analysts based in the US.

About the IAB

The Interactive Advertising Bureau (IAB) is comprised of more than 500 leading media and technology companies that are responsible for selling 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City with a Public Policy office in Washington, D.C. For more information, please visit iab.net.

IAB Media Contact
Laura Goldberg
347.683.1859
[email protected]