It’s no secret that mobile advertising is expected to grow globally in years to come, as smartphone use increases and the ability to target customers even more closely improves on mobile.
However, in the Middle East, mobile advertising constitutes only a fraction of regional ad spend, and SMS is still very popular.
Here’s a look at some of the statistics that reveal the difference between the global market and the regional market, so that startups can consider how to allocate ad dollars based on their target audience:
- Growth in global ad spend is accelerating. Growth is increasing from 3.6% in 2012 to 5.3% in 2013, and expected to reach 5.8% by 2015, according to a report by Advertising Expenditure Forecasts. One of the reasons for its acceleration is that, for the first time, mobile is expanding media consumption without cannabalising other platforms.
- Mobile advertising will jump to fourth place by 2016. Within the next two years, mobile advertising is expected to become the fourth most popular advertising medium, contributing 7.7% to total ad spend by 2016, compared to 2.7% this year, according to the same report noted above.
- Targeted ads are the name of the game on mobile. As mobile grows, programmatic advertising, especially real time buying, is gaining momentum, according to a report by Business Insider. Real time buying allows companies to buy highly targeted ads, based on a user’s interests and mobile usage habits, in the moment as they are browsing. Programmatic for mobile is growing at 56% annually in the U.S., according to the report.
- In the Middle East, the overall mobile market is growing. More people are using mobile phones, which means more potential customers. Mobile penetration rates are hitting new heights, reaching 109% in the region as a whole, according to an Ericsson report, and181.6% in Saudi Arabia alone. Mobile phone users are also attached to their phones more than any time before, as 60% of mobile phone users check their phones more than twice daily, according to Saudi marketing and communications company OTS.
- Mobile ad spend is still low in the Middle East, and it’s growing less quickly than the global average. Globally, mobile advertising grew 82.8% in 2012, while mobile ad spend in the Middle East grew 68%, according to the Internet Advertising Bureau, meaning that mobile ad spend in the Middle East as a percentage of the global total actually shrank from 2011 to 2012- from 1.3% of global ad spend to 1.2%.
- In the Middle East, SMS-based advertising is still a very popular method of mobile advertising. Data compiled by OTSshowed that 99% of SMS messages are read within three minutes of being received, and generally, companies in the region have seen a 40% increase in revenue after launching a successful SMS marketing campaign.
These conclusions echo something that several mobile services providers in the region have told Wamda: SMS is still often, a better bet than mobile advertising. Yet startups addressing a global audience won’t want to miss this trend.