China's Mobile Ad Market to Hit $500 Million: The Shape of Things to Come?

Mobile and digital may be the strongest sources of future growth for marketing. China is instructive because the mobile market is outpacing the PC market. Cost, electrical connections and convenience as in much of the developing world are the keys. The challenge is trying to determine how to fund that growth and its as yet unproven sales impact is measured. The other key consideration is figuring out how advertising and PR through traditional channels as well as through mobile stimulate and supplement each other. Getting that interconnectedness right is the key to sustainable commercial success. Kunur Patel reports in Advertising Age:

"Mobile ad spending will double this year in China to nearly $500 million, says eMarketer.

Levels of spending for mobile search, display and text-message advertising in emerging markets still pale in comparison U.S. mobile ad spending, which is expected to hit $1.1 billion by year-end. However, this meteoric growth is mobile spending outlines a trend toward mobile computing.

The number of mobile-phone users in China is nearly double the total U.S. population. More than 370 million people in China are expected to use the mobile web at least once monthly by the end of this year -- that's about half all mobile-phone users in the country. By 2015, more than 600 million Chinese will be on the mobile internet, which makes China, by far, the largest single-country market for the mobile web, according to eMarketer.

"The average U.S. consumer of reasonable means can buy an iPhone, Mac or iPad, and in the best case, all three," said Noah Elkin, mobile analyst for eMarketer. "In emerging markets, they're going to make a choice. The phone becomes the portable computer for the main-stream emerging economy consumer."

In China, however, internet ad spending still trumps mobile. In 2010, internet ad spending reached $3.6 billion. Accordingly, broadband penetration in China was 98% at the end of 2010, according to China's Internet Network Information Center.

Compare that to India, which only had 11.2 million broadband subscribers in January, despite the country's billion-plus population, according to the Indian Press Bureau. Only 8.6% of India's population will have access to the internet on any device this year, says eMarketer, and 12% of mobile phone users will access the mobile web. However, mobile ad budgets are still exploding, albeit from a lower base. From $56.5 million in projected mobile ad spending this year, the market will reach $247 million by 2015.

Brazil will also see mobile ad spending double this year to $24 million. In Russia, mobile ad spending will hit $20 million by year end.