U.K. Mobile Ad Spend Doubled in '08

Mobile ad spend in the U.K. reached £28.6 million in 2008, growing by more than 99 percent year on year, according to the IAB’s first Mobile Advertising Expenditure Study.

The research, which was conducted in conjunction with PricewaterhouseCoopers, concluded that mobile display advertising, consisting of banners, text links, in-game, and pre- and post-roll video, accounted for 49.8 percent of spend, or £14.2 million, with mobile paid search making up the remaining 50.2 percent, valued at £14.4 million.

The IAB attributed the growth to increasing audience numbers, the proliferation of sophisticated handsets such as Apple’s iPhone, and the growing popularity of social networking on the move.

Speaking with ClickZ News earlier this week, Alistair Hill, mobile analyst at ComScore, pointed out a substantial increase in the number of U.K. advertisers running mobile display campaigns. In reference to today’s IAB numbers, however, he said he was surprised by such a drastic increase in the search spend.

“The display numbers are very encouraging, but the search spend was definitely a surprise for me. This has large connotations for the future of mobile. When you look at the way online search took off, and the amount of companies involved with that space now, this implies substantial future growth for mobile search.”

Data for the study was contributed by 21 media firms, including agencies and publishers. The results account for media spend only, and do not include figures such as production costs, and SMS or MMS delivery costs.

Hill also suggested the development and adoption of localized search technologies could continue to help drive mobile investment. “The advantage of the mobile handset is that it can localize your position. Around six percent of U.K. mobile users are currently using maps, and this is growing by 60 percent year-on-year. Localized results will mean almost every business has an incentive to invest in mobile search,” he said.

Mick Rigby, chairman of mobile-focused media agency Yodel Digital, described the display spend as “encouraging, but nothing out of the ordinary.” Yet, in reference to the search spend, he suggested the IAB figure could simply reflect the extension of standard Google AdWords campaigns to the mobile platform. “I was surprised by those search numbers, but came to the conclusion that it was probably due to advertisers ticking a box on Google, rather than running dedicated mobile campaigns,” he said.

Despite current economic conditions, Rigby forecast a similar rate of growth for display in 2009, predicting spend of around £25 million.

The IAB said it is encouraged by the fact that media agencies are investing in dedicated mobile resources. The trade group plans to launch a how-to guide, designed to educate marketers on how best to plan and execute mobile campaigns in the next few weeks.