Increased Mobile And Social Spending Forecasts

Gail Chiasson, North American Editor

We’re seeing a lot of surveys regarding spending in the mobile and social sectors these days.

JP Morgan, the financial services provider, has forecast that US mobile ad spending should double the $600 million of last year to $1.2 billion in 2011.

Douglas Anmuth, JP Morgan analyst, forecast that mobile would be the biggest contributor to online growth in the coming few years, saying that mobile smartphone adoption has played a critical role in accelerating key industry trends including social and local.and that, as smartphone penetration moves beyond the current penetration rate, mobile is expected to have an even bigger impact on Internet business models. Supporting this trend will be rising mobile traffic and the introduction of networks offering faster connection speeds, although mobile ad spend may still only come in between $7 and $8 for every mobile subscriber.

This report says that holding mobile back at present are the limited inventory available due to smaller screen sizes, and concerns related to creativity. However, online video, apps, virtual goods and cloud computing tools were other technologies identified as potentially stimulating industry-wide growth.

Another survey, this of 300 top brand marketing executives commissioned by the Internet Advertising Bureau and conducted by Ovum Consulting, notes that 51% of brand marketers say they have built mobile into their ad strategy, either as part of wider campaigns or as a stand-alone effort. But mobile budgets are still small, with 55% spending less than $50,000 this year and only 7% planning to spend more than $300,000.

However, dollars allocated to mobile are expected to increase. The ‘Marketer Perspectives on Mobile Advertising’ report found that 72% of marketers are looking to increase mobile ad spending in the next two years, and 35% will boost budgets by more than 50%.

A branded mobile site is the most common type of mobile advertising with display advertising a close runner-up. More than half of the respondents have employed branded applications and SMS text advertising, and over 40% have turned to mobile search, video, multimedia messaging service, barcodes and mobile coupons.

When it comes to devices, the focus is on smartphones. Six in 10 executives put smartphones as high priority, and nearly one-third pointed to tablets as a key platform. Marketers expect usage on regular smartphones to increase over the next two years. Only 10% identified e-books as a top device for advertising, and 3%, console connected games.

The report noted, among obstacles to higher spending were device fragmentation, privacy issues and a lack of standardized metrics, as well as ad creative limitations. However, mpst marketers surveyed were relatively satisfied with mobile advertising’s ability to deliver on increased engagement (59%), increased brand awareness (58%), customer relationship marketing (57% and driving sales (54%).

And on the social marketing side, the majority of marketers are planning to increase their budgets this year according to a new report from the CMO Council.

According to its fifth annual State of Marketing Report, which took responses from 600 CMO Council members, 57% of firms will raise their expenditure in 2011, with a majority increasing their social media spend by over 5%.

To increase the effectiveness of their campaigns, 43% will turn to digital demand generation and online relationship building.

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