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Mobile Advertising Spending to Reach $743 Million in 2010

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Mobile advertising has finally earned a seat at the marketing table both in terms of dollars spent and brand strategy. According to a new report from eMarketer, US mobile advertising spending will reach $743 million this year and top $1 billion in 2011.

"The expansion of the smartphone market and the attractive usage and demographic profile of smartphone owners have forced more marketers to pay closer attention to mobile," said Noah Elkin, eMarketer senior analyst and author of the new report, "Mobile Advertising and Marketing: Past the Tipping Point."

eMarketer estimates spending on mobile advertising will grow 79% this year to $743.1 million, up from $416 million in 2009. SMS messaging is still the largest format in the mobile ad market-with spending expected to reach $327 million this year. However, spending on both mobile search and display ads is expected to soon surpass messaging thanks to the introduction of rich media formats, increased smartphone penetration and lucrative new ad networks.

Google's acquisition of mobile ad network AdMob and Apple's launch of iAd are important drivers for eMarketer's upward revision for mobile display advertising spending. The firm now says total mobile display spending, including video, will reach $230.8 million in 2010. The previous forecast projected the mobile display market would reach $166 million this year.

"It is safe to say that many marketers who had not previously considered mobile advertising are now anxious to tap into its potential thanks to the stamp of legitimacy applied to the medium by the high-profile entrance of companies such as Apple and Google," Elkin said.

Although small in comparison to the online advertising market, mobile is expected to grow substantially over the next few years. By 2014, eMarketer estimates advertisers will spend $2.55 billion on mobile advertisements as companies like Google and Apple bring scale to the industry.

"If Apple is the spark to mobile advertising, the combined Google/AdMob has the best chance of being the flame," Elkin said. "iAd is the latest bright, shiny object in mobile advertising, but Google is better positioned to simplify the media-buying process and bring scale over the long term to mobile advertising."

"The bottom line is: Whether or not Apple itself ends up being good at mobile advertising, iAd has been good for mobile advertising," he added.

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Tags: mobile advertising