Mobile screens are likely to stay small, but the share of ads they are taking on is becoming immense.

In fewer than five years, nearly seven out of every 10 digital ad dollars will go to mobile, according to a fresh forecast from Forrester.

That’s thanks to what the research firm is predicting will be a compound annual growth rate (CAGR) of 14.7% from 2017 to 2022.

Put another way, mobile will contribute 86% of incremental digital ad spending between 2017 and 2022, Forrester expects.

What is driving all this growth?

Mobile search and mobile social will continue to represent key drivers — accounting for 81% of the incremental mobile ad dollars spent between 2017 and 2022.

Next year, mobile social is expected to finally overtake mobile search as the largest mobile ad channel in the United States.

Illustrating mobile social’s unprecedented climb, Forrester previously estimated that the channel wouldn’t overtake mobile search until 2021.

What’s driving mobile social?

Forrester says it’s the increase in average revenue per user. Facebook, for one, saw a 37% year-over-year increase in its average ad revenue per monthly active user in the United States and Canada last year.

Mobile user growth is less of a driver, considering that it increased by just 6% last year.

Compared to display, meanwhile, social is much stronger on mobile devices. Mobile constitutes 88% of social spending, compared to only 53% of display.

In part, that’s because social benefits from the fact that its news feed format is much better suited for displaying banner and standalone video ads on mobile, Forrester reasons.

To be clear, mobile search isn’t dying on the vine.

Despite its being a relatively mature channel, mobile search was still the largest mobile ad channel in 2017, with $20.6 billion in spending — or 44% of the market.

Although its 12.5% CAGR from 2017 to 2022 will be the lowest of the three channels, search will still account for 36% of incremental dollars spent on mobile ads during that period.

That’s partly due to the number of mobile phone search users, which is expected to increase from 204.4 million in 2017 to 242.8 million in 2022.

Higher mobile search ad prices will also be a driver, Forrester expects.

 

 

 

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Source:  MediaPost, July 2018