In-app mobile ad spend will reach almost $17 billion by 2018, up from $3.5 billion last year, a new report from Juniper Research has found.

According to the report, growth will be driven by several key factors including improved targeting capabilities, as well as a trend for more effective interactive rich media ads to be deployed in preference to traditional static display advertising.

Tablets close the ad-spend gap on smartphones

?The report – Mobile Advertising: In-App, Mobile Internet & Messaging Strategies 2013-2018 – argued that while smartphones currently account for approximately 70% of in-app ad spend, the growth in tablet users and usage would propel greater medium-term spend.

It observed that tablet in-app ad spend would be further fuelled by the fact that CPMs (cost per 1,000 impressions) are significantly higher than those for smartphones, particularly for rich media ads, which also have higher CPMs than static display ads. By 2018, the tablet-smartphone ad-spend split will be almost 50/50.

>See also: Mobile drove all of Facebook's ad revenue growth in its latest quarter

Location, location, location??

The report also observed that although app downloads will increase exponentially to 2018, the majority of in-app advertising expenditure is likely to be spent on advertising with social mobile giants such as Facebook and Twitter.

Nevertheless, report author Sian Rowlands remained optimistic about the opportunities for smaller developers.

‘As the mobile advertising industry matures, more sophisticated advertising solutions are being installed by leading players with a clear trend towards utilising location-based advertising to drive greater relevance,’ he said.

‘These new technologies and formats will benefit stakeholders across the mobile advertising value network.’

Other key findings from the report include the prediction that global mobile ad spend will surpass $39 billion in 2018, up from $13 billion in 2013, and rich media ad spend will surpass display ad spend in apps by 2018 as more engaging ad formats see huge uptake.