Brief:

• About three out of four marketers (74%) expect to increase their mobile ad budgets in the next 12 months, while about one-third expecting an increase of 15% or more, according to a survey by Forrester Research and the Mobile Marketing Association. This trend matches the researcher's forecast that U.S. mobile display and social ad spend will almost double from $25.5 billion this year to $50.5 billion by 2021.
• Mobile now makes up a majority of social and display ad spend after overtaking desktop last year. More than two-thirds of mobile ad spending growth will be on social media through 2021, Forrester predicts, while 36% of survey respondents use mobile advertising primarily for branding, and 28% for direct response marketing.
• Marketers are increasingly producing digital ads specific to mobile-first, with 44% currently creating all digital ad assets specifically for on-the-go viewing on smaller screens. Less than a quarter of marketers repurpose ads from other media channels, the survey found.

Insight:

While Forrester's survey shows that mobile advertising is on a strong growth trajectory, it also highlights the challenges that marketers face in developing campaigns for wireless platforms. More than half of marketers said they don't have enough resources allocated to mobile advertising, and only 42% believe that their teams have the right skills for it. About two-thirds (64%) of respondents said mobile is restricted to a specialized silo, a surprisingly large number given that many marketing leaders advocate for mobile being integrated into all marketing from the earliest stages given its prevalence and unique user case.  Identifying collaboration across international divisions was also cited as a top challenge.

The report highlights the major need for service providers to help advertisers understand mobile marketing strategies and technologies. Marketers face a dizzying array of choices, making them unsure about which partners they need to help them with mobile-first campaigns. Fragmentation across channels, media types and operating systems has bred mobile startups that offer services among buying platforms, ad exchanges and data, analytics and measurement. Much of their focus is on in-app advertising. Less than one-third of marketers said they believe they have the best technology partners, and a further 36% are unable to tell whether or not their partners are a good fit.

Marketers are also frustrated with the inability to measure effectiveness of mobile campaigns. Only 17% can routinely attribute positive performance to mobile advertising, Forrester found. About 26% use outdated attribution methods like first-click, last-click, linear or time-decay attribution alone. Eleven percent rely solely on marketing mix modeling, which fails to provide user-level insights for optimization, per the survey. Another 12% use multi-touch attribution alone, while the remaining 50% use a combination of as many as six methods. About one-third of advertisers couldn't tell if specific ad formats were efficient at driving performance at all.

More than 57% named a lack of transparency on fees, data and media placements as key challenges in planning and buying mobile display ads. Media agencies are failing to address marketers' concerns about the ad-buying process, Forrester said. That opacity erodes trust in the advertising market and in ad agencies overall. Fewer than half of marketers surveyed said they have the right agency partner for mobile advertising, which should be a wake-up for service providers that can meet a growing market need.