Mobile Ad Spend to Hit $1 Billion, Media & Search Ads Expanding [Report]

EMarketer has released analysis of mobile ad spending that predicts decreased investment in message-based ads and dramatically increased investment in banner, search, rich media, and video ads on the mobile platform.

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As the iPhone 4S is released, featuring the Siri personal voice assistant that understands what you mean when you talk, it's clear that smartphone technology is stepping forward. (Although The Onion's story about the 4S's capabilities may be the best coverage.)

The increased presence of these high-tech tools, as well as decreasing costs, has pushed smartphone ownership toward becoming the "norm." eMarketer predicts that smartphone ownership will reach 38 percent in the U.S. by the end of this year.

The increase in smartphone ownership coincides with a significant increase in mobile ad spending, which should reach $1.23 billion for U.S. advertisers by the end of the year, up 66 percent from last year's $743 million figure. eMarketer predicts that the figure will continue to see escalating growth, reaching $4.4 billion by 2015.

Total investment isn't the only big change, though. Advertisers are focusing less on message-based ads (ads sent via text message, usually after the mobile user sends a subscription message via short code) and more on visual and search ads. While message-based ads are currently in the lead with 36.1 percent of spend, eMarkter predicts that will have changed by the end of 2012.

eMarketer specifically predicts that rich media and search ads will win 33 percent of spend each, leaving message-based ads at 28.2 percent of spend. This divide will grow further in the coming years, with eMarketer's 2015 figures showing messaging at just 14.4 percent to search's 40.2 percent and rich media's 36.4 percent.

The fastest growing segment, however, is video advertising. While it still holds a very small portion of the mobile ad market (at 4.7 percent currently), eMarketer predicts video "will grow at a compound annual rate of 69 percent between 2010 and 2015," reaching 9 percent of ad spend (an estimated annual figure of $395.6 million) by the end of 2015.

eMarketer's figures are based on "mobile advertising estimates from other research firms, company data from major mobile ad networks and vendors, marketers' mobile marketing strategies, and smartphone and tablet adoption and usage trends."

This forecast is in line with one from BIA/Kelsey, released in February, which predicted mobile ad spend woud hit $1.19 billion this year.

Speaking of advertising, online advertising hit a new high in the first half of this year, $14.9 billion, the IAB announced last week – with $7.3 billion of that from search advertising.