MBPT Spotlight: Numbers Game: Following Consumer Adoption, Mobile Advertising Explodes Worldwide

Smartphones and tablets continue to proliferate across global markets, and advertisers are leveraging changing mobile technology in order to stay ahead of the consumer. Indeed, eMarketer’s projections show that mobile ad spending worldwide is expected to increase to $125 billion by 2018, representing nearly 250% growth over this year.

That growth is partially attributable to the fact that mobile advertising still lags behind consumer adoption, and there’s a lot of room for marketers to increase their efforts in the mobile space. This year, 1.76 billion people worldwide will own smartphones, representing about one-quarter of the population, according to eMarketer’s latest estimates. Meanwhile, advertisers worldwide will allocate $36 billion to mobile advertising in 2014—a figure that only accounts for 6.7% of the $545 billion they will spend on advertising across all media. By 2018, mobile ads will increase to account for 18.7% of all total media ad spending worldwide, when 2.73 billion people—or 36.5% of the world population—will own smartphones.

The lag is driven by two particular areas that SMG is working to overcome: designing and building the most relevant and meaningful consumer experience on the mobile device and ensuring the ad tech platform we have to execute with is scalable, transparent, efficient and measurable.

This week, eMarketer released its annual “Global Media Intelligence Report” (GMI) in collaboration with Starcom MediaVest Group (SMG), which gives a comprehensive snapshot on media usage and advertising spending trends worldwide, covering six major regions—Asia-Pacific, Central and Eastern Europe, Latin America, Middle East and Africa, North America, and Western Europe—and including 48 individual countries.

In each of those worldwide markets, prevailing trends are predicated on the growth of mobile usage among consumers, and thus, mobile ad spending by marketers. And there’s a lot more going on at a high level. On a region-by-region basis, here are a few key highlights from the GMI report:

North America holds tight to world’s largest ad spending share.

In 2014, North America will remain the largest single contributor to the global advertising economy and represent 35.6% of the worldwide total, eMarketer estimates, as regional spending reaches $193.86 billion. With the online population still growing, as well as time spent with digital platforms climbing, digital ad budgets will leap again this year. Spending on Internet and mobile ads in North America will rise more than 17% to $54.34 billion, almost 39% of the worldwide total.

Asia-Pacific’s fast-growing economies make for fast-growing ad spending.

Despite differences in economic growth projections among Asia-Pacific’s constituent countries, the overall trend in ad spending for the region is a positive one. Overall, the region will account for more than one-quarter (27.9%) of global ad spend this year, behind only North America’s 35.6%. However, despite having more than half the world’s smartphone users in 2014 (951 million), Asia-Pacific only will only take 22.9% of mobile ad spending this year.

Ad spending in Western Europe continues to rebound as last year’s return to positive growth will continue.

The U.K. and most of the eurozone’s developed economies are returning to growth this year, as rising consumer demand and net exports help lift them further from recession. eMarketer estimates that expenditure on all measured media in Western Europe reached $112.03 billion in 2014, or 22% of global ad spending, and will grow again this year. As smartphone ownership surges across Western Europe, tablets are also playing an ever-larger role in consumer habits. Mobile’s share of digital ad spending in Western Europe is expected to climb from 24.0% this year to a remarkable 63.4% in 2018.

Economically, Latin America presents a mixed picture in 2014. Output is climbing steadily in most countries, but actual growth rates have declined since 2013.

As in previous years, Brazil will account for more than half of all regional ad outlays throughout the forecast period as ad spending there passes $20 billion, eMarketer predicts. TV remains by far the most influential ad medium in Latin America, and levels of Internet use are rather modest, though penetration is higher in cities and among young and affluent residents. Last year was significant as the share of Latin America’s population using the Web at least once per month passed 50% for the first time.

Ad Spending in Russia will rise by double digits this year, while total media spending in Central and Eastern Europe will reach nearly $25 billion.

As a better economic outlook in Western Europe raises prospects for Central and Eastern Europe, too, regional spending on all measured media will lift by $1.83 billion in 2014, eMarketer estimates, to reach $24.5 billion. The Internet is making steady if unremarkable advances throughout Central and Eastern Europe, and just over 58% of the region’s population will go online at least once per month in 2014. This remains well above the global average (39.5%) but far lower than in Western Europe, where 71.1% of residents will be regular Internet users this year.

In the Middle East and Africa, nearly one-quarter of the population will be online this year, and 8.9% will have a smartphone. The MEA region lags behind its global counterparts, but annual growth rates will remain in the double digits through 2015. Within four years, the region will register almost 458 million Web users, with more than 30% of all residents regularly online. Meanwhile, with respect to more basic mobile phones, MEA is already a star. Only Asia-Pacific has a greater number of mobile phone users. eMarketer estimates that 672.6 million people in MEA will have at least one mobile phone this year, and the tally will pass 730 million in 2015.