Author: Martin Wilson

Despite so much doom and gloom about local advertising in general – across newspapers, direct mail, TV, radio, yellow pages, outdoor, magazines and fixed online – collectively forecast by BIA Financial Network (BIA), parent of the Kelsey Group, to decline to $144.4 billion by 2013 from $155 billion last year.  The decline is clearly not going to be consistent across the full range of media. With budgets under pressure and advertisers beginning to demand far more tangible ROI, traditional media as we know it is likely to be hit far harder. New media will begin to command a far greater share of spend which will present significant opportunity for fresh revenue streams. BIA has forecast the new media share globally to grow from around 9% today to over 22% by 2013. A recent study from Pricewaterhouse Coopers (PwC) predicts by 2013 the new media share of advertising in the UK will be around 34%. So the advertising market is going to shrink and we are going to see significant substitution.

For some traditional media owners the speed of this shift will be very worrying. The changing environment will require a significant rethink of their business models and operating principles to even potentially survive. Many will simply not be capable of this transition.

Mobile I believe will be a very different story, and one of the few channels to see significant growth. In numbers terms of numbers, the Kelsey Group recently reported they expect mobile local advertising revenue to reach more than $3.1 billion by 2013, up from just $160 million in 2008. In May this year the Internet Advertising Bureau (IAB) for the first time reported UK mobile advertising spend, 2008 mobile advertising was £28.6 million. In isolation these figures today do not sound particularly impressive, and the 2013 figure potentially unrealistic, until compared to the fixed online environment. In 1998 the IAB reported UK internet advertising spend of £19.4 million, just 10 years later spend has grown to over £3.35 billion.

The growth in mobile advertising is likely to outstrip anything that has gone before, making the mobile channel one of the fastest growing advertising channels of all time.

Why is mobile so different? (coming next week)