New IAB Survey of 300 Brand Marketers Shows Rapid Rise in Mobile Budgets

NEW YORK--(BUSINESS WIRE)--Though mobile interactive advertising platforms are still considered a complex landscape of constant innovation by many brands and agencies, they are nonetheless being adopted at increasing speed, according to results from a new survey by the Interactive Advertising Bureau (IAB). “Marketer Perspectives on Mobile Advertising” found that 63 percent of respondents stated that their companies’ mobile advertising spend over the past two years has increased to some degree, with 29 percent reporting an increase of over 50 percent. The outlook for an uptick in the next two years is even more striking, with most of these key ad spend decision-makers (72%) saying that they are looking to increase their mobile advertising budget; 35 percent of respondents expect to increase spend by over 50 percent.

“Mobile advertising is advancing rapidly and many of the issues that slowed progress in earlier years have been overcome, for example constraints imposed by networks and mobile phone limitations have radically improved through developments in, respectively, mobile broadband and smartphones”

The study of 300 top-level brand marketing executives currently using mobile in their media mix was commissioned by the IAB Mobile Marketing Center of Excellence and conducted by Ovum, and unveiled today during the IAB “Mobile in the Mainstream…and as the New Main Screen,” in New York City.

“Given the current economic climate, these overwhelmingly positive ad spend numbers are telling. They truly underscore what those of us working in the mobile space have always recognized – that the remarkable evolution and progression of mobile interactive advertising has only begun to deliver on its extraordinary promise,” said Anna Bager, Vice President and General Manager of the IAB Mobile Marketing Center of Excellence.

Additional results revealed that half (51%) of the brand marketers surveyed already treat mobile platforms as an integral element of their overall advertising strategy. The other half of the survey’s respondents are also intrigued by mobile advertising’s benefits, but are currently exploring how best to leverage mobile platforms within their marketing plans: more than a third (35%) stated they are “experimenting” with mobile, while another 14 percent are tapping into mobile on an ad hoc basis.

Several of mobile advertising’s benefits received strong endorsements from respondents:

Immediacy (considered of high importance by 57% of respondents)
Cost-effectiveness (54%)
Increased engagement (52%)

The research study also asked marketers about which types of mobile devices they are presently reaching with their mobile ad campaigns. Ranked in order of highest priority, they are:

Smartphones (a high priority for 60% of respondents)
Tablets (31%)
Feature phones (22%)
Ebooks (10%)
Connected games consoles (3%).

Beyond being asked about interest and engagement in the mobile space, respondents were also queried about challenges. They cited several key hurdles in deciding whether to make larger mobile ad buys:

Device fragmentation (cited by 72% of respondents as a challenge of medium or high importance)
Privacy issues (70%)
Lack of standardized metrics (69%)

A significant number (60%) also ranked a limited opportunity for creative as a mobile challenge, which could in part be a reflection that most of those surveyed (62%) do not use creative agencies for mobile advertising. However, a majority (85%) of those marketers who are working with a creative agency on their mobile advertising objectives said that these partnerships produced good results.

“Mobile advertising is advancing rapidly and many of the issues that slowed progress in earlier years have been overcome, for example constraints imposed by networks and mobile phone limitations have radically improved through developments in, respectively, mobile broadband and smartphones,” said Eden Zoller, Principal Analyst with Ovum and author of the report. “I am confident that the industry and the IAB will successfully address the newer challenges marketers identified.”

UK-based Ovum Consulting (www.ovumkc.com) conducted the survey (April-June 2011) on behalf of IAB, consulting U.S. organizations currently engaged in mobile advertising, from seven distinct verticals (travel, financial services, FMCG, retail, media and entertainment, hospitality & restaurants and automotive) across four size-of-business bands (revenue less than $100m annual revenues, $100m-$500m annual revenues, $500m-$2 billion, and over $2 billion annual revenues) with local, regional and national advertising focus. Interviews were conducted with key marketer decision makers and budget holders (Executive Vice Presidents, Senior Vice Presidents and Vice Presidents in Marketing).

To review the entire “Marketer Perspectives on Mobile Advertising” study, visit: www.iab.net/CMO_Mobile

About Ovum

Ovum was founded in 1986 and has its HQ in the UK, with further offices in France, Germany, US, China, UAE, Taiwan, Japan, Australia, and South Africa. Ovum is comprised of two core business areas: consultancy along with research and analysis (R&A) teams, as shown in Figure 30. R&A is organized around key practices that together cover the whole of the telecoms, media and IT value chains. We have team of 150 media, telecoms and IT analysts and consultants, with 30% of analysts based in the US.

About the IAB

The Interactive Advertising Bureau (IAB) is comprised of more than 500 leading media and technology companies who are responsible for selling 86% of online advertising in the United States. On behalf of its members, the IAB is dedicated to the growth of the interactive advertising marketplace, of interactive’s share of total marketing spend, and of its members’ share of total marketing spend. The IAB educates marketers, agencies, media companies and the wider business community about the value of interactive advertising. Working with its member companies, the IAB evaluates and recommends standards and practices and fields critical research on interactive advertising. Founded in 1996, the IAB is headquartered in New York City with a Public Policy office in Washington, D.C. For more information, please visit www.iab.net.