Mobile Marketing Spend Set to Double by 2015

What are the main trends in web development and marketing in 2013? Write yourself a list, and then think about how many of them relate to mobile in some way, shape, or form. We would wager that almost all of them will relate to mobile devices in some manner.

Spending on mobile marketing initiatives has been on the increase ever since smartphones and tablets became dominant in the marketplace. That said there has been a marked increase in mobile marketing expenditure since 2010.

The figures above, from the Mobile Marketing Association (MMA), represent the amount of money spent in total, by businesses in the United States alone, on mobile advertising in 2010. By any reckoning, those are an impressive set of numbers, with total spend on mobile advertising reaching almost $2.5billion.

At the same time, it is important to note that more of the overall spend was on mobile customer relationship management (CRM) rather than advertising. In 2010, businesses were using mobile to target existing customers and maintain relationships, but were clearly missing a trick when it came to growing the business.

What changed in 2011?

As you can see, mobile CRM is still narrowly in front, but in the space of 12 months, mobile media advertising has rocketed over the $1billion mark, and has almost overtaken mobile CRM.

Did a light bulb suddenly switch on in digital marketing departments around the world in 2010/11, or was something else happening? One thing it is important to note is that the first generation iPad was released in April 2010.

At the time, no one knew whether it was going to be a success, and very few companies had committed additional marketing spend, not wanting to take the chance in 2010, when the global recession was still biting hardest. By the summer of 2010, it was clear what a great product the iPad was. Competitors started to develop rival products, the tablet wars kicked off, and it was obvious that mobile marketing was a massive opportunity.

Spending increased further into 2012, and it is due to do so again this year. The graph below charts these increases, as well as including forecasts for 2014 and the following year. We have changed the format of the chart so it is easier to decipher with so much data.

The results are simply staggering. While we speak about mobile advertising spend almost doubling from 2013 to 2015, based on these projections spending will have increased ten-fold in comparison to 2010. We also see that mobile media advertising is moving way out in front in terms of sub-categories of expenditure, and will continue to dominate, approaching 50% share of all mobile marketing spending from this year onwards.

Total mobile marketing expenditure is detailed below for the six years in question.

When one considers that projections for the following two years are conservative estimates, there is not telling how steep that curve may become.

Potential Returns

Return on investment (ROI) is a key metric that all marketing departments have to work with. One can assume that, with so much money going into mobile marketing, the returns will be lucrative, and that is indeed the case.

It is estimated that mobile spending will drive revenues of almost $217billion this year, almost doubling, in line with investment, to $401billion in 2015. That relates to a roughly 1:20 ration in terms of investment against returns. It is fair to day that anything that means you spend a dollar to get twenty back is worth following, and this makes the opportunities of mobile marketing obvious.

Who Will Benefit?

Clearly, the businesses that are investing in various mobile marketing platforms and initiatives are set to earn big in the coming years. Where there is potential to grow their markets and audience share, businesses could continue pumping money into mobile advertising and simply watch their revenues balloon to incredible levels.

At the same time, businesses will need to be careful that they do not jump blindly into mobile advertising just assuming that they are going to see success. This is especially true for smaller businesses, who will likely see such favorable ROI numbers and instantly think that mobile marketing is what they should be doing. While this is a natural attraction, thorough due diligence processes should be completed at every stage so that they know what they are spending their money on.

Remember that mobile advertising is a huge umbrella industry, and you might be talking about specific, targeted adverts, affiliate marketing, or SEO.

darth vader and mobile ads
Photo credit: Karan J

The Bigger Opportunity

As spending on mobile marketing increases, it is obvious that there is a huge opportunity for businesses that are able to offer expertise in these areas, such as Bough SEO, to grow their own client portfolio, and build revenues while continuing to increase their prominence and reputation in what is already a crowded, highly competitive market.

At the same time, the increased supply will mean the market is more lucrative for freelancers and startup companies that want to offer their services in these areas. While that is a positive thing, in general, those seeking out these services will have to be careful they choose businesses and marketing agencies that can do the job to a high standard.

This is particularly true for small businesses who might have to dedicate their whole marketing budget to mobile in order to see any results; if they are working with a poor company, that budget will not go far, and certainly won’t give anything like 1:20 returns.

The End of Desktop Advertising?

While it is not time to sound the death knell just yet for desktop advertising, expenditure in these areas will continue to decrease. Ironically, this could create an opportunity for those businesses that are still committed to desktop to enjoy a captive market.

However, one added consideration with mobile is that people are increasingly using their devices at home, as well as on the move, meaning that the importance of mobile marketing is even bigger than simply catering for people who are traveling around town.

Mobile marketing is a huge opportunity for businesses of all sizes. A well-planned and well-executed mobile marketing campaign has the potential to deliver huge revenues; make sure your business is set to be where the action is.

About the Author: Karl is an online content writer with a specific interest in digital marketing and the trends we are likely to see in the future.