Exclusive: Mobile advertising to skyrocket

The sensational growth of the mobile application (apps) market is causing forecasters to take another look at projections for mobile advertising. Borrell Associates, for example, has dramatically boosted its projections for the growth of mobile ad spending, according to new data being released this week. Borrell now predicts mobile advertising will be a $16 billion market by 2012, skyrocketing upwards from $1.9 billion in 2009. Kip Cassino, Vice President of Research for Borrell, thinks it’s going to be big. “We’ve seen the beginning of a swing,” he said, “that looks a lot like the swing we saw when search first started to get going back in 2003.”

It’s going to get a lot stronger a lot quicker than we first expected,” he added. Here’s the dramatic graph:

New Borrell Mobile Advertising Projection

The numbers are all about the mobile app market.

Kip CassinoThat market in and of itself is huge — projected to be $7 billion this year, with 8 of 10 apps being free, according to new data released this week by Gartner. Analysts predict mobile application stores’ revenue will grow to $29.5 billion by the end of 2013, but that has nothing to do with advertising. But this enthusiasm for apps is what researchers hadn’t anticipated, according to Cassino:

The apps in and of themselves don’t cost much to put on your mobile device, but they are the vehicles for an awful lot of marketing. They will be the way the TV stations, radio stations and others will bring their programming to people, the way all kinds of advertisers will try and get themselves in front of customers.

Gordon Borrell agrees but adds that local is a different animal when it comes to anything new.

We are sure mobile advertising will go up faster than we estimated in the past, and we’re now pretty sure it’ll go up faster than everybody else is forecasting. That said, I’m still skeptical that you’ll see the floodgates open in terms of spending by small businesses on mobile advertising. It’s never happened that way in the past with a new medium. They’ve always been reticent and conservative at first, then like lemmings when something begins providing undeniable and consistent results. So I suspect the big lemming-leap is probably a good two, maybe three years away for local mobile advertising.

So if you’re a local media company, what can you do to prepare?

The most important thing is to get into the app business, with emphasis not on content but commerce. The problem here is which phone do you build for or which service do you use? I’m not sure that matters as much as just getting into it. Start with the iPhone and move forward from there. In the beginning, it’s probably fine to start with content, but keep an eye on developments in the commerce space, like the aggregation of Twitter feeds from local businesses. Those could be turned into mobile apps.

Pay attention to your RSS feeds. I’ve been harping on this for a long time, but your RSS feeds simply must be more than “click here for more details.” Let’s not just shove links in people’s faces, but give them some real meat via RSS. This is what will drive your mobile apps downstream, so give it some thought today.

Pay close attention to the marketplace and be prepared to pull the trigger at a moment’s notice. Much of my day is spent reading and staying in touch with what’s happening in the tech world. You can and should do the same. Follow the folks at TechCrunch, GigaOm, TechMeme and elsewhere to keep abreast of developments in this rapidly-changing world.

I’m sure Gordon will be discussing this among many other things next month at Borrell Associates’ Local Online Advertising, The ‘Business of Making Money’ Conference.

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