Mobile Ad Spending to Hit $1 Billion

According to eMarketer’s forecast, mobile ad spending in U.S is expected to hit the $1 billion milestone by the end of 2011.

Mobile advertising is greatly catalyzed by Apple’s iAd and Google’s AdMob network. But mobile display advertisement isn’t the biggest chunk of the mobile advertising pie. Instead, traditional text messaging is the number one method to reach mobile users. Its simplicity and low investment cost are factors to explain its popularity.

With faster data network, mobile video ad spending is expected to rise too.

Perhaps, for some, the mobile ad trend seems very vague now. But it gets clearer when more people are adopting smartphones powered with mobile internet access. This trend is already happening and if it were to grow as predicted, the mobile ad market is certainly a lucrative market. This explained why Apple and Google are fighting so hard to become the mobile ad leader.

However, putting ourselves in the advertisers’ shoes, we should question if mobile technology is ready for our investment. It’s convenient to buy things via our laptops but purchasing securely through our mobile phones is still quite a challenge. The buying experience isn’t top notch and consumers aren’t “seasoned” to buy through their phones. Think about it, would you buy a t-shirt through your phone? Majority would say no. But we’re certainly more open to buy a mobile app. Our minds are “trained” to do so, thanks to the frequent exposure of mobile app stores.

It’s hard to see how mobile advertising can generate return of investment (ROI) for advertisers. Most spendings are probably for branding campaigns. This is just my guess. After all, we need hard data evidence to tell us whether mobile ads do generate ROI.