New Directions for Mobile Advertising (MM, SCOR, AAPL, GOOG)

Mobile ad network Millennial Media Inc. (NYSE: MM) has release a report on mobile advertising spending, and while the company clearly has a dog in the hunt, the survey data compiled by comScore Inc. (NASDAQ: SCOR) for Millennial has some general interest.

The mobile ad market is expected to grow from $1.8 billion in 2011 to about $13.5 billion by 2015. Millennial competes against Apple Inc. (NASDAQ: AAPL) and its iAds platform and Google Inc. (NASDAQ: GOOG) for a place in that market, as well as with other smaller players.

Smartphone adoption grew by 42% in 2011 and of smartphone owners those who use mobile devices are 22% more likely to own a tablet. Smartphone users who make entertainment purchases typically buy tickets, DVDs, games, or digital downloads, or use the devices to pre-order these items. The biggest reason for consumers to use smartphones to purchase entertainment products is convenience - according to the comScore study two-thirds of smartphone users cite convenience as the most important reason for making a purchase on a mobile device.

The study also notes that entertainment is the third highest ranking advertising vertical market for smartphones and that entertainment advertising spending grew by 133% year-over-year in 2011. That's well behind technology advertising, which grew nearly 700%, but it's still not trivial.

About 92% of mobile entertainment advertising promotes movies, cable and network TV programming, and DVD releases. Only 8% of the advertising spend currently generates sales. And while ad networks like Millennial are glad for the revenue, if they can figure out a way to make mobile advertising drive more sales instantly, advertisers will be lined up around the block.

The pieces are being put in place for just such a revolution. Mobile payment systems, near-field communications devices, in-app purchasing, and digital wallets are going to make smartphone sales even easier for consumers. And more lucrative for both ad networks and vendors.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Internet, Research Tagged: AAPL, GOOG, MM, SCOR
Read Full Story


NASDAQ 7,337.39 127.30 1.77%
S&P 500 2,747.30 43.34 1.60%
DJIA 25,309.99 347.51 1.39%
NIKKEI 225 21,892.78 156.34 0.72%
HANG SENG 31,267.17 301.49 0.97%
DAX 12,483.79 21.88 0.18%
USD (per EUR) 1.23 0.00 0.01%
USD (per CHF) 0.94 0.00 0.02%
JPY (per USD) 106.88 0.01 0.00%
GBP (per USD) 1.40 0.00 0.01%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.