What a difference a year makes. eMarketer’s September 2009 mobile advertising report carried the optimistic subtitle “Change Is in the Air.” Well, it’s safe to say that in 2010, change happened, and mobile advertising ramped up at a quicker pace than predicted.

eMarketer now predicts $743.1 million in total mobile ad spending in 2010, a more than 25% increase over last year’s forecast. Our projections are up on the order of 25% to 35% per year through 2014.

In my new report, “Mobile Advertising and Marketing: Past the Tipping Point” (full version available here to Total Access clients only), I explore in detail the key factors behind this increase in spending. They include:

• Major acquisitions of mobile ad networks by Google and Apple
• Rising adoption of super-capable multimedia smartphones
• The launch of the iPad and the rapid revitalization of the tablet market

Cautious optimism about economic recovery can take some credit as well, but it is really the injection of a new dynamic in the mobile space that is prompting marketers to overcome their reluctance to embrace mobile as a channel to connect with consumers.

Much of this new dynamic is attributable to the high-profile (and high-dollar) acquisitions by Google and Apple and the ways both companies have sought to redefine the mobile device and advertising markets. Google’s promotion of Android has made it a powerful alternative to Apple’s popular iOS platform. And Apple, in turn, has countered with the launch of the iPad, a new iPhone and iAd, the company’s own advertising platform exclusive to Apple devices.

As I noted in a previous blog post, iAd has generated its share of controversy. But in a recent address at the iMedia Breakthrough Summit, I shared the results of nearly a dozen interviews I conducted with industry executives over the past two months. Everyone I spoke with, including some of Apple’s competitors, agreed that iAd has been hugely beneficial to mobile advertising.

Google’s acquisition of AdMob is no less significant, because it will help bring scale to mobile advertising. In the report I write:

Part of what has made Google so successful is the degree to which it has helped demystify and simplify the media buying process. If it can achieve a comparable result with mobile and provide an equivalent level of tools, reporting and accountability, the effect will be significant in both the number of advertisers it will be able to attract to mobile and the amount they spend.

The importance of scale should not be underestimated; it is vital for the long-term viability of mobile advertising.

There is more detail in the report, but the bottom line is this: with consumers spending an ever-increasing amount of time in front of their mobile devices, marketers can scarcely afford not to pay closer attention to mobile. To the contrary, brands need mobile more than ever to stay relevant. And with more capable devices, faster carrier networks, ubiquitous wireless broadband and the availability of richer ad units, marketers have more possibilities than ever to deliver immersive experiences.

This shift is already well under way on the desktop. Starting with the rich media ads proliferating today, the next five years will see more interactivity, higher-powered creative and yes, perhaps even more emotion in mobile advertising.

We know mobile advertising is effective. The question is: how effective? Recent studies suggest pretty solid results for both direct response and branding metrics, better, in fact than some online ads.

The lead article in yesterday’s eMarketer newsletter, for example, reported low ad recall but high response rates for location-based service ads, based on results of a recent Luth/Mobile Marketing Association study. On the other hand, the same survey indicated fairly high recall rates (and correspondingly lower response rates) for display ads seen while browsing or using applications, particularly among mobile users ages 18 to 34.

The 11th installment of InsightExpress’ Digital Consumer Portrait likewise indicates impressive branding and direct response metrics for mobile ad campaigns. In a podcast interview with MobileBeyond, Joy Cicman Liuzzo, InsightExpress’ senior director of marketing & mobile research, noted that banner ads on mobile websites generate the highest click-through rates and the lowest annoyance factor, although among “mobile intensives,” 68% of whom have smartphones, app banners (appearing in both the top and bottom of the application) also generated favorable results.

In an earlier interview with Mobile Marketer, Ms. Liuzzo discussed how, in some cases, particularly where brand favorability and purchase intent are concerned, mobile ads can be five-to-six times more effective than online ads. Overall, mobile display ads outperformed SMS and mobile video in every category other than aided awareness and brand favorability.

These findings add weight to the interviews eMarketer conducted last fall with executives from Razorfish, JumpTap and Admob, who indicated that response rates to their display campaigns were as much as 10 times as high as those on the desktop Web. Patrick Moorehead (then with Razorfish but now VP and director of mobile platforms at Draftfcb) told eMarketer he had seen click-through rates for sponsored SMS campaigns go as high as 10%. Note that full versions of these interviews are available to eMarketer Total Access clients only.

One of the main points of last fall’s “Mobile Marketing and Advertising: Change Is in the Air” report was that the lack of on-screen clutter (relative to the desktop) and the ability to reach people at their point of interest contribute to mobile ad effectiveness. Higher response rates and better branding metrics, in turn, help make the medium more appealing to advertisers. As indicated by studies cited here, these trends—along with the ongoing mobile app frenzy—continue to drive the market forward.

The announcements Facebook made at its developer conference this week have resonated across the Web. On Wednesday I posted some initial reactions covering what they mean for marketers. On Thursday, I spoke with Mike Murphy, vice president of global sales at Facebook, to get the company’s perspective.

Here are the three key takeaways:

1. While Facebook may say that the Open Graph API, Like button and other social plugins that the company announced are aimed at developers, not marketers, there are direct implications for brands that advertise on Facebook.
2. Whenever a person clicks to “like” something they see on the Web, that information will go into their Facebook profile and marketers will be able to use the information to target advertising within Facebook.
3. Facebook has no plans—yet—to launch an ad network.

Here’s an edited transcript of our conversation.

eMarketer: What do yesterday’s announcements mean for marketers?

Mike Murphy: Yesterday was very much about developers, much more than it was about advertisers. Yesterday’s announcements really had nothing to do with advertising.

But there are four main areas where I think what we’re doing is going to improve the process, or the experience, for marketers.

Number one is simplicity; how simple it’s going to be now for marketers to bring a Like button to their page by dragging and dropping one line of code.

Next is the ability for marketers to distribute things that are happening off of Facebook—on their Webpages, their landing pages, their microsites, the contests they do—and bring them to Facebook. They can create viral spreading and organic distribution of that opportunity to Facebook and the 400 million-plus customers that are here.

The third area is personalization. Think about what happens when you go to a website and it’s personalized. It creates a more social experience. More and more marketers are trying to make their websites more social and more personal, and in doing so, some have succeeded and many have failed. There’s an opportunity to create a more personal experience that is more customized to the consumer.

The last thing is—and I think this is something that we’re still looking at—what we’ve seen happen for marketers that have a big fan count, or a lot of people on Facebook who have liked something they’ve done or liked their brand, that creates a much better and more actionable experience because of the social actions that come along within ads. For an advertiser, the influence that happens because of the number of likes that your brands have creates a better, much more engaging and much more successful campaign on Facebook.

eMarketer: Will you use information about what people “like” when they are outside of Facebook to create more-targeted advertising within Facebook?

Mr. Murphy: If I’m brand X and I’m running a campaign on Facebook and there’s a Like button on that campaign and I also put a Like button on my Webpage or promotion page or microsite, clicking on that Like button does the same thing. It sends the message that somebody likes your brand. If I’m Coca-Cola and if I have a Like button on my landing page, my site, and on Facebook, I’m looking to collect as many Likes as possible because it gives me the ability to publish into the news feeds. It also gives me the ability to use that influence on friends of friends on Facebook and makes them more likely to engage with my ads.

eMarketer: What if I’m on Pandora (which is implementing some of these new features), and I click to like certain bands or songs. Could a Facebook advertiser use that information to deliver targeted advertising?

Mr. Murphy: Yes, definitely. When brands go in [to Facebook’s ad targeting system] and say, ‘I’m looking for 18-24 males in New York who like Green Day,’ things that happen as a part of this Open Graph API will create better opportunities for those marketers.

eMarketer: So, using the Pandora example, if I click that I like Green Day, and that action is transmitted back to Facebook, then that becomes part of the information that advertisers can use for targeting?

Mr. Murphy: It’s another object and another interest that becomes part of somebody’s profile.

eMarketer: There’s been a lot of speculation about whether Facebook would launch an ad network. Now seems a perfect time to create a network that’s built off of information about people’s likes and interests outside of Facebook. What are your plans in that area?

Mr. Murphy: This is really about creating opportunity for developers to have a better product and a better platform to develop on. This has nothing to do with an ad network. We don’t talk about anything that could happen in the future, but this is certainly not a setup for that.

eMarketer: Obviously you’re hopeful that this will drive more advertising within Facebook. So how is business? Last December we estimated that you would have about $600 million in worldwide ad revenue. What can you say about that?

Mr. Murphy: We can’t comment on anything specific around revenue. What we can tell you is we are really happy with how things are going through all of our channels, thru our direct sales organization, our inside sales organization, our online channel. Things are going very, very well and we’re very happy with the progress we’re making.

There are at least 3 points to consider about Yahoo!, which released its full year 2009 revenues on January 26th.

1) Compared with search advertising revenues, display advertising is becoming more important than ever to Yahoo! (which just reinforces the necessity of the Bing deal with Microsoft).

2) Yahoo!’s Q4 results indicate that brand spending is slowly coming back overall, not just for that company but in the overall US online ad market.

3) Back to search: Google is continuing to eat not only Yahoo!’s lunch, but its breakfast as well.

The backstory for those 3 points can be fleshed out by these 5 related spending trends, all US market only (which made up 73% of the company’s 2009 revenues): (Read more…)

I just completed a report on how consumer packaged goods companies can maximize social media for their business. It won’t be published for a few more weeks, but I wanted to preview a few datapoints gleaned from my research:

1. CPG brand loyalty is ebbing. The CMO Council and Catalina Marketing found that the average CPG brand lost one-third of its most loyal customers in 2007 and 2008—before the recession took hold.

2. Consumer goods marketers (a category that includes CPGs as well as a range of other product types) accounted for just 3.1% of social network display advertising spending in August 2009. If CPGs are on social networks (which they definitely are) they aren’t forking out paid media to support their presence there.

Is there a relationship between these two things? Could CPGs drive more brand loyalty by buying more advertising on social networks? Or does brand loyalty come from something deeper—perhaps a more organic presence in social media?