The Money in Mobile

by Chuck Martin on December 20, 2011

There’s a wealth of research pointing to how big the mobile market will be say, three to five years from now. While some of the monetary projections may turn out to be true, we thought it might be useful to take a look at the current amount being spent on mobile today.

Perhaps more importantly, it’s where the money is being spent. Depending on your perspective, the market can seem small, medium or large.

It’s sort of like the old tale of a group of blind men each touching an elephant. After each one touches a specific part, they compare notes and find they’re in total disagreement.

While not the entire mobile elephant, here’s a look at the money is in mobile this year, all based on 2011 year-end research from a range of sources.

  •  $264 million in mobile advertising in Europe. This is being led by the UK, Spain, Italy, Germany and France, according to UK-based research firm mobileSquared, and ahead of earlier projections due to increasing smartphone adoption.
  • $1 billion in mobile app advertising. With worldwide mobile app downloads soaring (App Store revenue last year was almost $2 billion), in-app advertising revenue will reach $1 billion, says Berg Insight.
  • $1.2 billion mobile ad revenue. For the US, eMarketer pegs the year-end number at $1.23 billion. Meanwhile, UK-based mobileSquared has it at $1.42 and Gartner sees worldwide ad revenue at $3.3 billion. No matter how you measure it, mobile ad revenue is going up.
  • $1.9 billion in iOS and Android game revenue.  Gaming activity has been moving from dedicated game consoles to iPhone and Android devices and the app analytics firm Flurry sees the revenue following.
  • $2.2 billion on ringtones and ringbacks. Yes, people still are spending on personalized services like ringtones and ringbacks and will have spent more than $2 billion on them this year, says research firm Gartner.
  • $2.5 billion in mobile revenue to Google. The mobile run rate at Google has gone from $1 billion last year to $2.5 billion this year, according to Google CEO Larry Page. It may help that Android Market jumped to more than 500,000 apps, according to the research firm Research2Guidance.
  • $3.7 billion revenue from premium mobile app downloads. With more than 18 billion apps being downloaded this year they can’t all be free and analyst firm Ovum pegs the paid-for apps market at almost $4 billion, double last year.
  • $5.4 billion in mobile coupons. That’s the value of the mobile coupons redeemed by customers globally, according to Juniper Research. Future coupon projections are stratospheric.
  • $6 billion in mobile commerce. While still a small base of overall transaction volume and a small percent of all sales, it continues to grow, says Forrester Research.
  • $10 billion on mobile retail campaigns. There’s some overlap in the Juniper Research numbers here because the overall mobile spend by marketers also includes mobile coupons, but still not an insignificant number.

For overall context, the amount of total global mobile payments for digital and physical goods this year is $240 billion, says Juniper Research. This includes the total value of mobile payments for digital and physical goods, money transfers and NFC (near field communications).

So the next time someone asks where the money is in mobile, you might ask which part of the mobile elephant they’re asking about.

 

 

 

 

 

Chuck Martin is author of The Third Screen; Marketing to Your Customers in a World Gone Mobile, The Smartphone Handbook, CEO of Mobile Future Institute, Director of the Center for Media Research at MediaPost Communications and a highly sought-after mobile marketing speaker.

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