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11th April 2011

IAB Canada Reports Huge Growth in Mobile Advertising

IAB CanadaThe Interactive Advertising Bureau of Canada has announced that Mobile Advertising Revenues in Canada exceeded budgeted expectations of $18 million, and grew by 169% over 2008 numbers, to just over $31.9 million for 2009. For 2010, Canadian Mobile Advertising Revenues are forecast to grow by 60%, to $51 million.

The Top 10 Earners in IAB Canada’s Mobile Advertising Revenue Survey accounted for 90% of Total Net Revenues in 2009. Revenue concentration among the Top 10 earners has increased substantially over levels recorded during previous years, which ranged from 79% in 2006 to 81% in 2008.

In order to get an update on Ad Spend as per other Media, but also keep track of the rapidly growing Application (App) development industry; for the first time, Mobile Advertising Revenues were separated into mutually-exclusive Ad Placement/Spend and Production-Only categories within IAB Canada’s Survey.

Ad Placement/Spend was the main engine behind the 169% increase in overall Canadian Mobile Ad revenues in 2009, growing at a rate of 325% year over year, driven primarily by Mobile Messaging, with $15.65 million in Net revenue. Mobile Search also grew dramatically in 2009 — to $6.7 million — exceeding Mobile Display/Sponsorship Ad Revenues, which grew to $5.1 million.

Production-Only Ad Revenue was led by monies received for the development of Mobile Applications, which experienced a massive 1377% growth rate compared to 2008, due to the proliferation of smartphones of all makes and models, following the iphone launch in Canada in April 2008.

Among the 11 Product/Service categories examined in 2009, Telecommunications, Entertainment and Packaged Goods accounted for 50% of all reported 2009 Mobile Advertising Revenues in Canada; Automotive, Financial, Leisure Travel, Media and Retail categories collectively generated 43% of Canadian Mobile Ad Revenues; with the remaining 7% belonging to the Technology, Pharma and Other categories.

Because it is at such a nascent stage, Mobile advertising’s annual revenue growth rate was dramatic in 2009 (+325%), compared to the substantial decline mature major media saw (-11% when averaging across all of TV, Newspaper, Radio, Out Of Home and Magazines); and was 23 times faster than Online’s impressive growth of +14% during the same year.

Mobile marketers believe Advertisers do not currently allocate enough funds to digital as a whole, to permit carving-out a meaningful amount of dollars for Mobile; perhaps because Mobile has not yet been proven for many verticals, or because Canadian audience measurement for Mobile is not yet in place. Mobile marketers recognize that getting Advertisers to consider where Mobile might fit into their overall digital strategy is an important first step in establishing permanent, annual budgets for Mobile.

Going forward, it is believed that local market Mobile Search and Mobile location-based advertising will drive Mobile’s audience expansion to levels that will meet Advertiser and Agency demands for reach in combination with targeting. Increased Smartphone penetration will also drive critical-mass audiences and multi-media content consumption, accelerating the addition of Mobile to multi-platform advertising programs — combining for example — TV, Internet and Mobile.

“Mobile marketing was well on its way to reaching critical mass as of 2009,” says Steve Rosenblum, Director of Research, IAB Canada. “Given that the study was conducted late in 2010, budgeted estimates should also paint a very accurate picture of growth for the whole year, and as a result, show even more momentum building in 2010.”

Paula Gignac, President, IAB Canada agrees. “Mobile advertising is growing in the typical hockey-stick manner, and shows no sign of plateauing in any way shape or form at this point. What will drive even more Advertiser acceptance now is more Research, Education, Standards and Human Resources dedicated to the channel — precisely what IAB Canada began six years ago with the creation of its Mobile Committee within the Emerging Platforms Council — but which will now be accelerated with the launch of our new Mobile Council, and new partnerships with the Mobile Experience Innovation Centre (MEIC) and OCAD University just last week.”

This entry was posted on Monday, April 11th, 2011 at 10:38 am and is filed under Associations, Business News, National News, Research Studies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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