Mobile advertising spend expected to rise

Mobile advertising is expected to rise as smartphones continue to penetrate the Kiwi market. Photo / NZH

Smartphones now make up 30 per cent of all handsets in New Zealand and a jump in mobile advertising should soon follow, says an advertising business organisation.

Up from 13 per cent in 2010, smartphone penetration should hit 50 per cent early next year, according to a survey by the Interactive Advertising Bureau and 3DI.

At the same time, figures out today from IAB international show over US$5 billion spent worldwide on mobile digital advertising in 2011.

The Asia-Pacific region accounted for 35.9 per cent of revenues, North America 31.4 per cent, and Europe 25.9 per cent.

However, the total mobile advertising spend in New Zealand in 2011 was a mere $632,092, according to a report by IABNZ in February.

While mobile advertising in NZ is very much in its infancy, it has enormous potential for growth, said Alisa Higgins, IABNZ general manager.

With smartphone penetration increasing yearly, and the increase in mobile internet usage, we should see more media dollars being spent on this channel, she said.

"It's very small in New Zealand but growing quickly," Higgins said.

"I'm confident we will reach the $1 million mark at the end of this year."

Until now, a number of obstacles have prevented companies from developing marketing strategies to include the mobile channel, Higgins said.

"The price barrier for handsets and data has been higher in New Zealand than other countries.

"Those prices will come down this year. The telcos are going to have to get more competitive with data plans."

As it becomes easier to afford smartphones, companies will respond by adapting their advertising strategies for the mobile market, Higgins said.

Mobile advertising should also lift with the entrance of major mobile and digital communications companies like Inmobi, Big Mobile and Mobile Embrace into the Kiwi market, she said.

"These guys specialise in selling to mobile space. So, when you've got these companies coming into the market it's natural that we'll see a huge jump."

Confusion around how to actually advertise on smartphones has also been an obstacle.

A potential mobile advertiser has to think about creating separate applications for iPhone and Androids.

Additionally, a company needs to build a 'mobile optimised' website, one that can be viewed via a mobile web browser.

All three options are expensive, Higgins said.

Nevertheless, with the proliferation of smartphones in the Kiwi market, avoiding mobile advertising will soon not be an option, she said.