Mobile App Ad Market to Surge

Advertising delivered by mobile apps is a drop in the bucket now, but it is about to take off, rising to $8 billion by 2015, according to a new forecast from Borrell Associates. This year, ad spending on mobile apps will reach $305 million, more than doubling to $685 million in 2011.

Of the $8 billion in ad dollars projected for 2015, local advertisers will spend $1.2 billion.

The number of devices that can receive the messages will fuel the growth in mobile advertising. Today, that stands at one in five devices. By 2015, the number will triple to three in five.

For advertisers, the challenge will be to pick the right apps. Churn is high. While the average smartphone has 22 apps on it, the half-life of an app is about a month. In six months, only 5 percent of apps have been retained.