Mobile advertising to grow 300%, hit $40 billion by 2018

In the next five years, mobile advertising will grow over 300 percent from about $13 billion today to just under $40 billion, Juniper Research says in a new report. Believe it or not, that guidance sounds too conservative, and too slow.

Consider just two data points:

In the 12 months ending July 2013, Facebook went from almost no mobile revenue to a massive 41 percent of its revenue coming from mobile ads. And a few days ago, a report from The Search Agency says that a full third of Google’s paid clicks are now on mobile devices.

Above: Total Mobile Advertising Spend ($m) Split by Messaging, Ringback, In-Content and Mobile Internet, 2018

Image Credit: Juniper Research

Since about 70 percent of mobile ad revenue is split between these two horsemen of the smartphone and tablet era, mobile has most definitely arrived. And since such huge segments of revenue for two of the largest ad-selling companies on the planet — Google had a $50 billion year last year, Facebook might do $10 billion this year — is on mobile, it may not take until 2018 until total mobile ad revenues blow through $40 billion.

In addition, Twitter has hardly begun its mobile monetization efforts, to say nothing of Tumblr, Yahoo, which says “future is mobile,” Microsoft, and others in the market.

Everyone’s future is mobile, clearly, but there is one caveat.

There is still a significant difference between revenue per click on mobile and revenue per click on desktop. For example, tablet ads are worth more than smartphone ads, and desktop ads still bring in proportionally more revenue. That will likely change over time as mobile becomes more the default and less the add-on.

Google has already included mobile in Enhanced Campaigns and Facebook is adding video to mobile ads.

The fastest growth area in mobile ads will be in-app advertising, Juniper says, with another big chunk for mobile Internet, and a smaller slice for messaging, where apps like Line and WhatsApp take in huge sums of money. And the fastest-growing region will be India, with 400 percent growth between now and 2018.