Mobile advertising in UK soars by 116% in one year

Angry Birds can take a bow – its influence on smart phone usage is huge

Mobile advertising in the UK has soared by 116% to £83 million* in 2010 compared to £37.6m in 2009. Many more traditional advertisers are investing in mobile as finance, telecoms and FMCG increase their spend. The figures are part of the third annual IAB and PwC mobile study.
Entertainment & media dominated the spend for the past couple of years, but its dominance is reducing as other advertisers get on board the mobile rollercoaster.
Advertisers’ spend on search on mobile has nearly tripled from 2009, going up from £20.2 million to £54.9 million. Display advertising in the form of banner ads, text links, and tenancies experienced a rise of 62% to £23.7 million, from £14.6 million in 2009. The mobile format of pre-and post-roll adverts also experienced a rise of 492% to £1.1 million, up from £0.2 million in 2009, showing that the rich media opportunities that smartphones offer are being taken advantage of by advertisers.
Anna Bartz, strategy manager at PwC, said, “We are witnessing patterns of growth similar to online advertising in its early stages. Increasing technology packed into handsets coupled with decreasing costs, presents brands with a tempting opportunity to target mobile consumers.”

Top spenders
The report shows the top five display advertising categories in 2010:
• Entertainment & Media – 32.9% (61.5% in 2009)
• Finance – 18.6% (8.1% in 2009)
• Telecoms – 14.3% (14.7% in 2009)
• Consumer Goods – 11.8% (3.2% in 2009)
• Automotive – 6.5% (2.5% in 2009).

Expenditure on Mobile advertising formats
Search – £54.9 million, up from £20.2 million in 2009, a growth of 172%.
Display advertising – £28.1 million, up from £17.4 million in 2009, a growth of 61%.
This category is broken down into:
• Banners and text links were up 62% year-on-year to £23.7 million (£14.6m in 2009).
• Tenancies were up 18% year-on-year to £1.7m (£1.4m in 2009) and a market share of 2% (3.8% in 2009).
• Pre- and Post-roll advertising was up 492% year-on-year to £1.1 million, (£0.2m in 2009) and a market share of 1.3% (0.5% in 2009).
• Other formats – including display advertising within SMS / MMS – £1.6 million, up from £1.2 million in 2009, a growth of 32% year-on-year.

Market Shares
Search continues to dominate with a market share of 66% (54% in 2009)
Display advertising (banners and text) – market share of 29% (39% in 2009)
Other formats (tenancies, pre/post roll, SMS and other) – market share is 5% (7% in 2009).

KEY DRIVERS AND INSIGHTS
• In 2008, the year records began, mobile phone advertising accounted for £28.6 million.
• In 2009 mobile phone advertising increased 32% year on year to £37.6m.
• UK smart phone ownership in 2010 was up 58% year-on-year to 36% of the UK (Dec 2010, comScore)
• There are 24.2m mobile users in the UK (Dec 2010) – up 22% year-on-year (comScore, 2010)
• The number of minutes spent on the mobile internet is up 45% over 2010, to 6.6bn minutes (comScore GSMA MMM, 2010)
• The number of minutes spent per user, per month went up 32% over 2010 to 301 minutes per person (comScore GSMA MMM, 2010)
• Mobile media users pick up their phone 18 times a day to consume content via apps/browser. (Mobile in the Media Day, IAB Research Jan 2011)
• 40% of mobile media users agree they often use their mobile if they see an interesting ad (Mobile in the Media Day, IAB Research Jan 2011)
• 51% of the UK population has engaged in M-Commerce (IAB Consumer M-Commerce Study Oct 2010)
o Used mobile for research for purchasing (43%)
o Used mobile for enhancing a purchasing experience (35%)
o Paid for something on mobile straight to bill (37%)
o Paid for something on mobile via card/bank/PayPal (27%)

* Figures do not include SMS/MMS production and delivery costs, and other mobile marketing revenues like app production.