2011 budgets for mobile apps are poised to grow 58.7 percent over the course of the upcoming year, accelerating from 2010 growth of 45.1 percent, making it look like apps are the fastest growing category of mobile advertising.
So says an advisory released today by Internet analysts Stifel Nicolaus, a partner with Millennial Media in the DIGIDAY Q3 Apps State of the Industry Survey.
Key findings:
• Mobile apps budgets are estimated to increase 59 percent in 2011, accelerating from the 45 percent growth respondents estimated in 2010. We note that this is more than double the growth rate that we expect for mobile advertising as a whole. Mobile advertising categories include SMS, Search, and Display ad units on mobile WAP portals.
• Mobile apps are gaining share within mobile advertising budgets. In the Sept. 2010 survey, advertisers estimated that mobile app advertising budgets will increase more than 50 percent in 2011. Our prior work has placed the growth of overall mobile advertising at a more modest 20-25 percent rate. In short, the vast majority of growth in mobile advertising is happening on the App side of the ecosystem. One caveat: mobile search advertising trends may not be captured fully in either analysis, as Google's platform bundles clicks from mobile search into its broader AdWords platform.
• Client Demand for Apps Less of an Impediment to Larger Budgets: In the Q4 2009 survey, 31 percent of publishers responded that lack of client demand was a concern in determining mobile app budgets. However, the Q3 2010 survey found that 12 percent of respondents thought that client demand remained a key impediment to higher budgets. Supply-side issues (distribution of Apps and size of the mobile target audience) persist.
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