As smartphone use grows, the advertising spend via these devices is following suit. Though the ad messages are today often still in SMS format, advertisers are now beginning to switch to banners and rich media.

The market for advertising on portable phones is today experiencing exponential growth in the United States.  Internet-focussed market research company eMarketer, which has just carried out a study on the subject, is forecasting a total spend of $1.23 billion for the current year, an increase of 80% on the $743 million recorded in 2010. This will be the first time that ad spending in this market segment has passed the billion dollar mark and it’s unlikely to slow down: the eMarketer study predicts that it will have reached over $4.5 billion by end-2015.

Faster than expected growth

To explain this level of growth, eMarketer points to the widespread take-up of smartphones on the US market. Close to 40% of all American portable phone users are likely to own an Internet-enabled mobile device by the end of 2011.  So far, the preferred means of reaching the consumer through cellphones still remains texting. However, given the increasing number of users accessing the Internet via their portable - 41% this year - this is likely to change.

Growing preference for new advertising tools  

So from 2012, online banners and rich media – i.e. interactive advertising, video clips, etc. – will take over as the number one spending line, with $600 million or 33% of the total. Video spots, accounting for a $57 million spend this year, are set to be the fastest-growing format for advertisers, with a projected growth rate of 69% per annum, to reach $395 million in 2015. Last year’s (2010) eMarketer survey on mobile advertising investment forecast total spending of around $1.1 billion by end-2011, and $2.5 billion by 2015.