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Retailer not putting their ad spend where their customers are, suggests study

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Brands and retailers are not putting their advertising spending where their customers are, as most pay only lip service to mobile while consumers are lapping it up.

So the results of the latest Berg Insight study into global advertising has found. According to the analyst, the total value of the global mobile marketing and advertising market will grow from €6.9 billion in 2012 at a compound annual growth rate (CAGR) of 26% to €27.9 billion in 2018.

This will then correspond to 19.3 percent of the total online advertising market or 5.9% of the total global ad spend for all media. On a global level, mobile search advertising is estimated to represent the largest share of more than 50% of the total mobile ad spend, followed by display advertising and messaging.

However, consumers are increasingly interacting with the web – and brands and retailers thereon – using mobile devices.

“There is currently a mismatch between the ad dollars spent on different media and the share of time consumers devote to the various channels”, said Rickard Andersson, Senior Analyst, Berg Insight, who believes that some channels such as print media receive a greater share of the total ad spend than can be motivated from a consumer behaviour standpoint while other channels receive too little investments.

“Mobile devices are on average devoted a double digit percentage of consumers’ time, yet the channel only attracts a few percent of the total global ad spend”, says Andersson. He adds that this discrepancy can be explained by the relative newness of the mobile channel as an advertising medium and the formidable growth of mobile media consumption in recent years. Berg Insight expects that a correction in the ad budgets spent on different media is imminent, thus paving the way for a severalfold increase in mobile ad spend in the coming years.

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