Smartphones To Grow Potential Internet Ads Worth $50B

While everyone was watching the Moscone Center in San Francisco, Morgan Stanley analysts on Monday were telling the CM Summit in New York how mobile Web advertising is worth much of a potential $50 billion global market. That’s because the number of consumers accessing the mobile Web has seen “unprecedented early stage growth,” ramping much …   Read More

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While everyone was watching the Moscone Center in San Francisco, Morgan Stanley analysts on Monday were telling the CM Summit in New York how mobile Web advertising is worth much of a potential $50 billion global market.

That’s because the number of consumers accessing the mobile Web has seen “unprecedented early stage growth,” ramping much more quickly than PC Internet usage did, according to the analysts’ presentation. By 2010 smartphones will for the first time outsell all personal computers, both desktop and notebook, to the tune of almost 500 million units. Thus, more consumers will be reachable by the mobile Web than by traditional Internet.

How much faster have consumers adopted mobile Internet usage? With the iPhone (and the related iPod Touch), 86 million people accessed the Internet via the device within the first 11 quarters of the handset’s launch; and in Japan, mobile service provider NTT DoCoMo saw 31 million users of its game-changing i-mode Web service during its first 11 quarters. In comparison, only 18 million consumers used Netscape during the first 11 quarters of the online service’s debut. Last year, 40 percent of the U.S. population, some 123 million people,  accessed the Web via 3G networks; in Japan 3G penetration is 80 percent, or 99 million consumers.

Japan also offers insight into how the global mobile marketing industry will grow. There, mobile ad revenue was $1.031 billion (during the same time, mobile ad sales in the U.S. was just $333 million), with advertisers spending $11 per mobile user. Meanwhile mobile commerce is proving its worth: Consider that Japan’s top e-commerce company, Rakuten Ichiba, in 2009 saw 33 percent year-to-year mobile revenue growth, compared to the 15 percent growth in desktop revenue, with mobile making up 19 percent of all sales.

Another potentially big source of revenue: the search and location-based markets. According to analysts, 48 percent of U.S. mobile browser users utilized search in April 2010, more than the number who engaged in social networking.

Mobile will help grow the underused Internet ad space. The Web makes up 13 percent of all ad spend, yet takes up 28 percent of consumers’ media consumption time. Compare that with the 26 percent spent on ads in print, where consumers spend only 12 percent of their media consumption time. Analysts see a $50 billion global opportunity in the Internet ad space–and clearly mobile will account for much of that.

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3 comments

  1. Eydie

    Giff, that's a very good point, especially considering the rise of the netbook. Though I'm pretty sure that iPhones make up the plurality of 3g access in the U.S. And of course there's the uber-geek segment of the population, like a good friend of mine, who take their laptops everywhere including the bars at night 🙂

  2. Giff Gfroerer, i2SMS

    Let's be careful how we translate the above comment: "Last year, 40 percent of the U.S. population, some 123 million people, accessed the Web via 3G networks."

    In 2009, the vast majority of the US Population accessing the web via 3g networks were laptops accessing the web via a dongle and not on a cell phone. Yes, this number is growing. We place it somewhere in the 80 million current IP cell phone users in the US.

    Just be careful when you read figures to fully understand what the figures actually mean.

  3. Smartphones vs. Traditional Internet Advertising | PointAbout

    […] That’s because the number of consumers accessing the mobile Web has seen “unprecedented early stage growth,” ramping much more quickly than PC Internet usage did, according to the analysts’ presentation. By 2010 smartphones will for the first time outsell all personal computers, both desktop and notebook, to the tune of almost 500 million units. Thus, more consumers will be…” Read full post. […]

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