By Jon Mew (@jonmew), Director of Mobile and Operations, Internet Advertising Bureau (IAB)

Reading our recently released UK mobile ad spend figures for the first half (H1) of 2012, you’d be forgiven for forgetting the turbulent state of the UK economy.

Our research found that on a like-for-like basis, mobile grew 132% to £181.5 million. This growth is phenomenal and means that mobile now accounts for 7% of all digital ad spend.

Advertising on mobile feels like it has finally arrived and is starting to really excite advertisers. From great rich media ads, to amazing developments in voice, picture or local search, through to location based messaging where Telefonica Digital is leading the charge, brands can do more today on mobile than they ever could.

Of course it’s not all just about the advertising technology – one of the other main factors driving this growth is the change in consumer behaviour fuelled by the penetration of smartphones in the UK – now at almost 60% of the population.

As with online, search marketing dominates mobile spend, accounting for £131.3 million (73%) of total mobile ad spend, a 152% increase from H1 of 2011. This is a staggering jump and is only set to increase, with mobile search clicks in fact predicted to overtake online by the end of 2013.

Display formats on mobile also show no sign of slowing down, with the total spend at £49.9 million – a 91% increase on a like-for-like basis. This can be largely attributed to advancements in technologies, with 20% of display advertising spend on rich media formats. Other formats including SMS / MMS grew by an impressive 109% to £5.9m

Figures like this hammer home the fact mobile advertising is a medium no brand can safely ignore any more.

Total Mobile Ad Spend Breakdown

 

It’s exciting times for the mobile industry and there is still plenty of room for growth. However, a recent study conducted by the IAB found that 63% of the UK’s 100 biggest advertisers still don’t have a mobile-optimised website. This is quite a shocking figure. People are increasingly going online via their mobile phones and if you don’t have a website that’s optimised for mobile you’re effectively slamming the door in your customer’s face when they try to visit you!

When you consider that consumers spend almost 70% longer on sites that are optimised, it’s obvious brands are really missing a trick. Advertisers of course will get wise to this, so we’re likely to see significant mobile advertising growth for some time yet.

While we don’t do forecasting at the IAB, we do work closely with FirstPartner, who predict that by the end of 2012 mobile ad spend will exceed £500 million. If these predicted figures hold true, it means that H2 spend for mobile will be greater than that for radio. FirstPartner is also predicting that by 2016 mobile ad spend could reach a staggering £1.5 billion. So watch this space as it’s exciting times ahead for mobile!