App demand boosts mobile ad revenues

Brands are expected to spend £305.4m on mobile marketing in the UK during 2012 due to the rising popularity of apps, a new report reveals.

Mobile Apps

The study, by research firm Strategy Analytics, reveals that advertisers are expected to more than double (108.2%) their in-app advertising spend, compared to a smaller proportion (50.6%) for display advertising.

The growth will be matched by a projected 16.6% rise year-on-year in consumer spending on mobile media, particularly apps.

Consumers are likely to spend £559.6m on apps, accounting for more than a quarter (25.8%) of total consumer spend on mobile content.

The company claims that 2012 could be the first year in-app promotions (£82.9m) surpass display revenues (£61.1m).

David MacQueen, director of wireless media strategies at Strategy Analytics, says in the “eyes of many advertisers” web browsing on smartphones is “playing second fiddle to the app economy.”

He adds: “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.”

Last month data from the Internet Advertising Bureau (IAB) revealed that UK advertising spend on mobile activity rose 157% year-on-year to £203.2m in 2011.

Globally, advertiser spend on mobile marketing is forecasted to almost double (85.4%) from $6.3bn (£3.9bn) to $11.6bn (£7.2bn).

In contrast, consumers are expected to increase this spend on mobile media by a further 13.4 per cent from $121.8m (£75.7bn) in 2011 to $138.2bn (£85.7bn) in 2012.

Apps are predicted to make up 18.9% of global consumer spend this year and are currently the second largest category for revenues after data plans and web browsing.

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