China, India to see fastest mobile ad growth, global market to grow 19% in 2013

China and India will be the hottest markets for mobile advertisements in the immediate future as an exploding smartphone and tablet population in these countries are targeted by brands, Gartner has predicted.

The research agency also admitted that the growth of mobile advertisements has been faster than it initially anticipated, partly due to the rapid rise in popularity of tablet devices. This has eaten into print and other traditional forms of advertisement, Stephanie Baghdassarian, research director at Gartner, said.

“The mobile advertising market took off even faster than we expected due to an increased uptake in smartphones and tablets, as well as the merger of consumer behaviors on computers and mobile devices.”

It said that mobile usage is growing so fast that advertisers are simply not able to keep up with the rising inventory.

“This creates a surplus condition that is driving down unit ad prices which in turn has led to a situation in which a significant portion of mobile ad inventory is taken up by app developers paying for ads to promote their apps and get them more downloads, a category known as “paid discovery,”” it noted.

As a result of the faster-than-expected take up of wireless devices, the mobile advertisement market will grow by an impressive 19% this year to $11.4 billion, the agency added.

As expected, Japan and South Korea leads in the adoption and popularity of mobile ads, but other markets are not close behind.

“The high-growth economies of China and India are expected to contribute increasingly to mobile advertising growth, as their expanding middle classes present attractive markets for global and local brands,” it said.

Advertisers in North America and Western Europe are less nimble when it comes to taking advantage of the mobile platform, compared to their Japanese or Korean counterparts, the agency suggested.

They “will close the gap as the mobile channel gets more and more integrated with 360-degree advertising campaigns, eating up budgets historically allocated to print and radio,” it said.

The growth will benefit app developers, ad networks, mobile platform providers, specialty agencies and even communications service providers.

Gartner said that at present, mobile search advertising, where ad links are placed into search results, is more dominant than display advertising, where product ads are displayed, mostly in the form of banners. Display faces a problem in the ad market due to the limited screen size.

The mobile display ad market itself is divided into two categories – the traditional display method and the in-app display method. Gartner believes that traditional display, in web pages, will overtake the in-app format in 2015.