Mobile ad revenue will reach $11.4bn this year, according to Gartner, although the analyst is warning of a bubble reminiscent of the early days of web advertising.
Gartner said that, while mobile ad spend is growing, it is outstripped by the amount of time consumers spend on mobile devices. As a result, mobile ad inventory is being created faster than advertisers can shift their spending to mobile, creating a surplus that is driving down unit prices. Much of this is then taken up by developers to promote their apps, who Gartner says are often close to, or even exceeding, their maximum ad spend. This creates a circumstance that is reminiscent of the early days of web advertising, in which cyclical advertising arrangements among websites created an inflated picture of revenue that proved unsustainable.
“Some correction in the growth rate must occur before demand from brand and local advertisers catches up with supply, and more sustainable economics support a faster growth rate commensurate with consumer adoption,” said Stephanie Baghdassarian, research director at Gartner.
Gartner also predicts that mobile ad display will take over from mobile search as the driving force behind mobile ad spend.