Smartwatches to incite ad spend to the tune of $70M by 2019, says report

smartwatch on a wristEarlier this year a report surfaced that mobile advertising company TapSense was working on a programmatic ad platform to serve ads on the Apple Watch. Although it remains unclear how the platform may eventually integrate with Apple Watch – if at all – TapSense is clearly preparing itself to eke out a piece of what appears to be a very lucrative market. A new study, released by Juniper Research, suggests that digital advertising spend on smartwatches could reach $68.6 million by 2019, up from an estimated $1.5 million this year.

According to the research, the exponential growth will be largely due to “high profile brands” – such as Apple – entering the smartwatch business and widespread consumer adoption of wearables.

The report further argued that the arrival of an extra consumer screen will entice advertisers to the platform. Most advertisers, however, will run ad hoc campaigns until the smartwatch user base is big enough to warrant full-scale, highly targeted campaigns.

The report cautions that advertisers and brands will have to rethink their campaigns and advertising formats to adjust to, and cope with, the comparatively limited screen real estate on smartwatches.

Another challenge advertisers will face, notes Juniper, is the difference in consumer behavior compared to smartphone usage. Instead of viewing the screen for minutes at a time, like consumers are likely to do with a smartphone, smartwatch users are likely to only glance at the screen for seconds at a time. As a result, capturing consumers’ attention will be challenging.

Ad format and timing will also be critical when considering how consumers interact with their smartwatch. An advertiser can ill afford to serve an ad that blocks the reason the user looked at the smartwatch in the first place.

Programmatic, or real-time bidding, advertising will be one of the leaders in advertising aimed at smartwatches, claims the research.

“Programmatic advertising has evolved over the last couple of years from low levels of implementation to becoming an integral cog in the system.”

Photo credit: Stiftelsen Elektronikkbransjen | Flickr