Mobile media to be worth $380bn

Warc, 6 August 2014

BOSTON: Spending on consumer mobile media services, via a handset and excluding tablets, is expected to rise to $380bn by 2018 from just over $236bn in 2013, a new report has forecast.

Market intelligence firm Strategy Analytics based its findings on consumer mobile media services covering handset browsing, mobile apps, mobile games, mobile music, mobile video, mobile TV, ringtones, wallpaper and alerts.

It said mobile operators will be the main beneficiaries with spending on mobile data accounting for over $254bn, or 67.3%, of total mobile media revenue by 2018.

But there will be strong mobile advertising revenue growth as well, the report said, and it is expected to record a compound annual growth rate (CAGR) of just under 20% over the next five years to eclipse consumer spend on premium content.

Mobile advertising is expected to double to nearly $41bn by 2018, taking it to almost 11% of total mobile media revenue.

While advanced media markets, such as North America and Western Europe, are forecast to continue driving mobile data adoption, Strategy Analytics consultant Nitesh Patel said maturing markets will produce the strongest revenue growth.

"We expect less mature mobile markets, where a large portion of users have basic or feature phones and remain served by 2G networks, to exhibit the strongest growth in mobile media revenue," he said.

To take best advantage of the development, he recommended operators drive mobile media growth through casual data traffic or service-orientated pricing, especially as low priced smartphones become increasingly available.

David MacQueen, executive director of apps and media at Strategy Analytics, predicted gains for advertisers and brands over the next five years.

"Importantly, as more brands and retailers optimise the mobile commerce experience, an increasing proportion of mobile users will use their phone to make purchases, enhancing the benefit of mobile advertising," he said.

Data sourced from Strategy Analytics; additional content by Warc