THE BLOG
10/18/2013 04:31 pm ET Updated Dec 18, 2013

Retail Mobile Ad Spending Skyrockets, Doubles In First Half Of 2013

Now that nearly everyone on the planet is carrying around the Internet wherever they go and are spending much of their time on smartphones, advertisers are shifting their resources to mobile ads in an effort to better reach their target audience.

According to the Internet Advertising Board (IAB), one of the leading advertising consortiums, mobile advertising revenue jumped from $1.2B in 2012 to $3B just in the first six months of 2013. That's an increase of 145%, with the retail, entertainment and technology sectors leading the trend.

Although various industry verticals contributed to the rising mobile marketing spends, the retail sector continues to be a major driver of mobile marketing and ad spending. In fact, retail accounts for nearly 40% of mobile ads. "Consumers are embracing new screens, new content and transforming how they shop, communicate and consume content at an accelerated clip," said Sherrill Mane, SVP at IAB. "And, in response, marketers are turning to those same interactive arenas just as quickly." Mobile devices, primarily smartphones, are changing the way retail reaches consumers.

One of the main reasons for mobile advertising gaining momentum is that retail consumers are a moving target. In the past, most consumers made their decisions from desktops and laptops from either at home or the office. Today, more than half of the time spent online is from a mobile device, according to a comScore and Jumptap study. Most mobile users tend to be men and women between 25 and 49 years of age.

Since talking represents only about one-fourth of the time spent on mobile devices, there is ample opportunity for retailers to interact with consumers and offer a more personalized brand experience. This may include geo-targeted ads that send coupons and special promo offers directly to mobile customers as they approach a particular retailer or pull into the parking lot of a competitor. The growth of in-app ads (ads inside popular mobile apps) is very promising as consumers begin to accept them.

One of the top mobile advertising platforms recently released a report announcing their retail mobile marketing and advertising figures for Q2 2013. Retail mobile ad spending has grown by an impressive 413% on their network. This clearly signals an indication of the level of importance that the retail industry has towards mobile marketing and the corresponding increases in the number of ad campaigns for smartphones and mobile devices.

In case you're wondering if the mobile ad market is over saturated, there is still plenty of room to grow. Ad spending on mobile devices is a mere 15% of the overall marketing dollars spent on Internet advertising, according to IAB estimates. Search and display spending in the form of banner ads and digital video continue to dominate; however, this is likely to change dramatically in the near future as mobile marketing continues upward. Some experts are predicting that mobile ads will be the majority of Internet advertising within two to three years. Whether or not that actually comes into fruition is anyone's guess. The fact is that mobile advertising gives retailers the ability to reach their audience wherever they are. They may be at the office, shopping at the mall or looking for a place to eat. Right now it looks like mobile advertising will be a big opportunity for retailers well into the future.