Strategy Analytics predicts that, globally, combined consumer and advertiser expenditure on mobile media—which includes handset browsing, mobile applications, mobile games, mobile music, mobile video, mobile TV, ringtones, wallpapers and alerts, and associated data—will rise at a 8.4% compound annual growth rate, from below $150 billion at the end of 2012 to $224 billion by 2017.
In 2012, global revenue from mobile advertising and content will hit $67 billion, according to the new Strategy Analytics forecast. Some highlights of the report:
- Applications downloads will grow 38 percent to 23 billion.
- Applications spending will grow 30.7 percent to $26.1 billion.
- Applications will make up 18.9 percent of mobile media outlay.
- Mobile advertising spending will grow 85.4 per cent to $11.6 billion.
- In-app ad sales in the US and Western Europe will overtake mobile web display sales ($934.5 million).
- “Despite the huge audience of 271 million users, ad revenues from mobile video are tiny—a meager $223 million globally in 2011.”
- A projected 9.5 percent increase in mobile data subscription sales to $82.8 billion.
In the latest Global Mobile Media Forecast from Strategy Analytics, consumers are expected to increase the spending on mobile media by a further 13.4% from $121.8 billion in 2011 to $138.2 billion in 2012. In contrast, advertiser spending on mobile media is expected to almost double (85.4%) from $6.3 billion to $11.6 billion, resulting in the total mobile media economy reaching $149.8 billion in revenue in 2012—a 17.0 percent increase on 2011.
While the lion’s share of consumer spend (60.2%) is on data plans and web browsing—making mobile operators the key beneficiaries to the tune of $82.8 billion in 2012, up 9.5% on 2011—a key driver of growth is the apps market on smartphones, such as the iPhone and Android devices. Over 23 billion apps were downloaded globally in 2011, increasing by 38% to over 32 billion in 2012. Apps are now the second largest category for revenues (for both consumer and advertiser spend) and are becoming the key distribution mechanism for media on mobile phones.
Despite remaining relatively flat in terms of spend, music remains one of the top mobile media categories globally, accounting for $16.0 billion or 11.6% of 2012 consumer spend. However, the way consumers' access and pay for music is changing. Ringtones are declining fast, but streaming music services such as Spotify, Pandora and Deezer—paid for by subscription or through advertising—are gaining good traction in Western Europe and the USA. Pandora is considering returning in Canada in 2012.
As with apps, growth of mobile video usage is increasing dramatically; 108 billion videos were watched on mobile phones in 2011, almost trebling to 280 billion in 2012. However, unlike apps, this isn’t translating into symbiotic revenue levels. Despite a 23.8% revenue growth, video is likely to account for a mere 2.4% ($3.6 billion) of total mobile media revenues in 2012.
Revenue related to Social Networking content, apps and services is expected to increase by 16.1% to $17.6 billion, accounting for 11.8% of all mobile media revenues.