Mobile ad dollars are growing, according to eMarketer. As smartphone usage expands, revenues from the ad-supported component of mobile music, games and videos alone will grow 52.7% this year to $433.8 million.
Two things are driving the increase – one being the growing audience for mobile music, gaming and video content. The second reason is that more and more content providers are shifting to an ad based revenue model, stimulating marketplace spending. Spending on ads for mobile music, gaming and video content accounted for 20% of the revenue in the space last year but will increase to 30% by 2015, to nearly $3.59 billion. The remainder of the revenues will be paid by subscription and download fees.
There’s a strong tolerance for mobile ads if the apps are free – new study info from Nielsen showed both that free apps are preferred by consumers and 51% of consumers say they are okay with advertising on their devices if they can access the content for free.
Monetizing mobile content with ads is becoming increasingly important for services such as Pandora. With the most downloaded free music app in Apple and Google app stores, Pandora sees the majority of its audience on mobile devices.