Study: ’09 Not a Stellar Year for Mobile Advertising

Mobile advertising is not expected to have a banner growth year in 2009 as once predicted, but ad-supported mobile applications should provide the fledgling segment a major boost in 2010, according to a new report issued by the research firm Magna.

Magna has downgraded its previous forecast for mobile ad growth in 2009, primarily due to the brutal economy. The firm sees mobile ad revenue climbing by a still healthy 36 percent year over year, albeit from a small base; spending is now expected to reach $229 million during 2009, up from $169 million last year (to keep those number in perspective, most analysts expect digital advertising as a whole to exceed $25 billion this year).

Still, Magna’s report is bullish on mobile’s near term future, based primarily on the confluence of three major factors. First, the user base for mobile in the U.S. is already enormous (224 million users, per Nielsen Online). Next, the mobile Web is hot—as the rise of smart phones like the iPhone and the Blackberry Storm have made Internet surfing via mobile devices tolerable, and even compelling. Magna cited recent data from comScore, which places the daily mobile Web audience at 22 million in January, double that of a year ago.

Lastly, the apps phenomenon, also drivenby Apple and its smart phone brethren, is set to open up the medium to advertisers, predicts Magna. “We expect a re-acceleration in 2010 as the emerging mobile applications market organizes to support the sustained growth of ad-supported apps,” wrote Bryan Wieser, Magna’s CFA, global forecasting, the report’s author.

As for right now, Magna sees mobile ad networks and basic text messaging as the medium’s advertising bright spots. Given their ability to provide advertisers efficiency by pooling impressions across numerous sites, coupled with their access to inventory on various apps, mobile ad networks, says Magna will exhibit “the greatest growth in absolute terms over the next several years.”

Text messages, i.e. SMS advertising, should also represent a solid growth sector in the next few years, according to Magna’s analysis, primarily because SMS is a good complement to traditional media. “Text messaging platforms represents the best near-term potential for advertisers who want to use mobile devices to support broad-reaching marketing campaigns,” said mobile.

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