The mobile advertising industry has spent the past several years growing at an explosive rate (reaching triple digits, annually). eMarketer estimates that, in 2014, the United States alone will buy $17.73 billion worth of mobile ads. But where, exactly, is this mushroom cloud of money coming from?
Retail accounts for nearly 1/4 of all mobile ad spend
Mobile Ad Spend – Retail
Ground zero of the cash-plosion is happening, unsurprisingly, in retail. Retail will account for $4.09 billion in mobile ad revenue this year—nearly a quarter of the total spend.
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“Within the retail sector, we’re seeing a lot of innovation and a lot of appetite for growth, and the realization that mobile is critical in terms of becoming… a core eCommerce platform,” said Megan Tweed, vice president, media at Razorfish.
Because retail claims such a huge part of the pie, it’s worth breaking down the retail ad spend even further, by vertical. According to a study by XaD, Big Box stores are the biggest spenders in town, accounting for nearly a third of all retail mobile campaigns. This is closely followed by General Apparel, Home & Garden, and consumer electronics, which between them account for an additional half of retail’s mobile advertising. The remaining 20% or so is divided up amongst a variety of smaller players.
Image Courtesy of Xad
Mobile Ad Spend – Finance
Financial service institutions and banks might not be the first thing that jumps to mind when you think of mobile advertising, but eMarketer’s report places the finance industry in second place behind retail with a projected $2.2 billion ad spend in 2014—12% of the pie. The reason? Banks in particular are seeing wildly higher CTR on mobile. It’s simple math:
Average click-through rate for Mobile ads: .34
Average click-through rate for non-Mobile ads: .09
In other words, the click-through rate for mobile ads in this industry is nearly FOUR TIMES higher than that of non-mobile digital ads.
The Finance Industry sees substantially better results with mobile ads, despite only allocating about a third of their overall digital ad spend to mobile.
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“Whether it’s mobile, social, video or search, we are investing more in all of them than we have been historically,” said Jamie Moldafsky, CMO of Wells Fargo.
Mobile Ad Spend – Entertainment
It’s surprising that eMarketer’s report puts Entertainment ad spending in 9th place, overall. Typically, Entertainment is a major buyer of mobile ads—especially given the overwhelming number of mobile apps that buy ad real estate in other apps. Millennial Media’s 2013 Year In Review report, in contrast, actually listed the Entertainment industry as the #1 biggest spender on mobile ads last year.