As targeted mobile advertising picks up, global ad expenditure on mobile channels is expected to exceed $11bn annually by 2015, up from $3.1bn this year.

With the growing penetration of location-aware and augmented reality-compatible smartphones, key brands are focusing on apps for getting the message out to consumers.

Research by communications consultancy Juniper Research shows that brands are taking a two-tiered approach to mobile advertising. While many brands are using in-app advertising, others – such as Barclaycard and Volkswagen – are creating their own apps. The idea with building your own app is to increase your brand exposure (the “cool” factor).

The increasing popularity of GPS-enabled smartphones is also allowing brands to push location-based campaigns, where they geo-fence selected zones to push messages to customers that enter those designated areas. Starbucks and L’Oreal, for example, are championing this approach.

Yet despite the rising popularity of apps for advertising, Juniper Research’s Dr Windsor Holden warns that apps aren’t the be-all and end-all of mobile advertising either.

“While smartphone apps can be extremely effective at generating brand visibility, they are by no means the optimal means of reaching the target demographic for every product, or for engaging with that demographic,” warns Dr Windsor Holden, the author’s report.

“In may instances, a simple, interactive opt-in SMS-based campaign might be far more effective.”

Want more? Read our feature on the app economy, with in-depth interviews with how entrepreneurs are using apps to engage with customers.

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