New statistics from Gartner have quantified an emerging trend in the smartphone industry: more ads can be expected to be developed and viewed on this medium. Much of these ads will be in the form of apps - a format that has exploded in the past year, Gartner noted. Revenue from mobile apps registered $4.2 billion last year; by 2013 it is expected to reach $29.5 billion.
Of that amount, 25% will be coming from advertising in 2013, compared to 5% last year, according to Carolina Milanesi, research director at Gartner.
Changing Demographics
In part that leap forward will be due to quickly changing demographics. "Today's iPhone users know what they are doing and what they want from their applications. But when it is my mom on a Series60 device, she's going to think twice before spending," says Milanesi. So developers who want to make money will have to look at securing advertising deals, she adds. (via PC World).
The revenue opportunity is still there, but the money won't necessarily come from end users, she said.
The Google-AdMob Behemoth
The multiple deals that have been inked will also drive more ads onto mobile devices. Late last year Google proposed a $750 million proposal to acquire the mobile ad network AdMob. Privacy advocates are challenging the deal and the Department of Justice is investigating it. Assuming it goes through, the AdMob deal will expand the sales of ads that appear in applications on Android-powered smartphones, Google Inc. CEO Eric Schmidt has said, according to Bloomberg news.
Together, AdMob and Google will be the largest mobile-ad company, with up to 40% of the market, according to IDC researcher Karsten Weide.
Apple Enters
This month Apple announced its own plans to acquire another ad platform, Quattro Wireless. With the deal, Apple is hoping to shake up the mobile advertising business, as competition grows between it and search giant Google, according to BusinessWeek.
Apple is reportedly considering a number of approaches such as taking user data collected through iTunes and the App Store, marrying that with geo-location technology to create targeted, local advertisements that would be more relevant to consumers. Apple CEO Steve Jobs does not think much of the current mobile ad market and its stagnant technology. Improving the situation, he believes, will make Apple even that much harder to beat.
