Is mobility poised to overtake television as the category that matters to advertisers? That’s the intimation from Sheryl Sandberg, COO at Facebook (News - Alert), who during an event in London last week said that mobile is as important as TV, if not more so, when it comes to marketing relevance. Increasingly, though, it’s the multiscreen combination of television and mobile devices that may offer the next big wave of advertising opportunity.

The high level of mobile phone penetration in developed markets (comScore (News - Alert) said that smartphone penetration in the United States has reached 57 percent) makes reaching consumers via their pockets an attractive proposition to advertisers. The opportunities for targeting, location-based services and interactivity in mobile ads is a tantalizing fruit for those looking to bolster consumer engagement.

“Mobile is context, it is the new fabric of our beings and how we navigate the world today,” Craig Elimeliah, vice president and director of technology and digital solutions at Rapp, New York, told Business Insider. “TV has been struggling to keep its head above water and even the TV that is working is competing with so many other screens that anything done on that platform is diluted simply because of the distractions that are all around us.”

Enter the second-screen potential, of course. The opportunity to meld mobile ads with linear television, for instance, is a bold new frontier for mobility marketing. The Shazam (News - Alert) mobile app for instance lets consumers “listen” for ads to receive special offers and information on their smartphones while watching a broadcast.

“The most interesting stuff happening right now is integrating gaming, television and mobile all together,” said Joakim Borgstrom, a director of innovation at Goodby Silverstein & Partners, told BI.

And it seems that marketers are beginning to get the message. For the second year in a row, mobile advertising has achieved triple-digit growth year-over-year, according to the IAB Internet Advertising Revenue Report for the full-year of 2012. The past year saw the mobile category surge 111 percent to $3.4 billion, pivoting off of 2011’s record-breaking 149 percent year-over-year rise to $1.6 billion. In all, mobile accounted for 9 percent of total Internet ad revenue in 2012.

“As smartphones get smarter, cellular networks get faster and user penetration of smart mobile devices increases, the combination of personalization and location will have tremendous appeal to marketers,” said David Silverman, partner at PwC U.S., which partnered on the survey. “We are just at the tip of the iceberg.”

Digital video, meanwhile, brought in $2.3 billion, marking a significant year-over-year increase of 29 percent in 2012, compared to $1.8 billion in 2011. Digital advertising revenue overall climbed to a milestone high of $36.6 billion in 2012. That number marks a 15 percent rise over 2011’s full-year number, which itself had been the highest on record, at $31.7 billion.

Digital video and mobility are beginning to play together, IAB found. “These record-breaking numbers represent a paradigm shift when it comes to marketers recognizing the role a multiplicity of screens plays in effectively reaching today’s consumers,” said Randall Rothenberg, president and CEO at IAB. “Mobile, in particular, soared due to its ubiquity and intrinsic ability to serve as a powerful digital dashboard that travels with you from morning commute to nighttime video viewing and beyond. The significant increase in digital video also underscores the importance of the upcoming digital content new fronts and the vitality that sight, sound and motion play for both consumers and advertisers in the digital era.”

As the mobile advertising space matures, advertisers and ad networks are implementing methods to optimize ad delivery performance — while still being careful to safeguard user privacy. Opera Mediaworks’ State of Mobile Advertising found that contextual information easily acquired from mobile traf­fic data, such as device (or OS) and connection type (e.g., mobile vs. Wi-Fi) often serves as the ­first criterion. But, advertisers are ­finding that simple additions to this criteria, such as time of day or day of week, or a carefully thought-out frequency-capping regime, can provide signi­ficant enhancement to an ad’s performance.

Opera also found that while click-through rate is still important to advertisers, conversions are ultimately what matters. “Creative, relevant rich media ads work well to engage potential customers and build a lasting relationship with them, but conversions are the goal, as they directly drive business forward,” the report said.

Meanwhile, consumer goods advertisers—which spend the largest amount on marketing campaigns overall—are mainly turning to mobile ads to bolster brand awareness rather than driving site traffic or increased footfall in-store, according to new research from Millennial Media.

Almost half (46 percent) of consumer goods advertisers stated that their main campaign goal was brand awareness. Dovetailing with that, in 2012 a full 40 percent of consumer goods campaigns executed on the Millennial Media platform involved real-time location-based targeting, such as alerting consumers about nearby store locations where a product could be purchased.

When it comes to executing on mobile advertising, much of the battle is writing for the devices in question. To that point, Opera found that Apple (News - Alert) iOS devices continue to garner the lion’s share of traffic, commanding a 44.53 percent stake. iPhones and iPads also have the highest average e-CPM, together bringing in 49.23 percent of the revenue. Android meanwhile came in at 31.26 percent of the traffic and 26.72 percent of revenue.

“Also of interest is the continuing importance of tablet devices to the mobile marketplace,” the report noted. “For the ­first time we are speci­fically singling out Android tablets as they grow to a small but noticeable share of the market. Meanwhile, the iPad dominates, growing to over 6 percent of all ad impressions and over 12 percent of all revenue. Finally, as we anxiously await the impact of Samsung’s S IV devices, note that the Galaxy S III devices drove 11 percent of all Android traffi­c, up from 9 percent last quarter.”

In theory, HTML5 apps should bolster the rise of mobile advertising by making it much simpler to write campaigns. HTML5 ads run inside a mobile browser and are not specific to any one OS. But, HTML5 still faces challenges in accessing device-native features across all mobile browsers, and in rendering graphically-rich user interfaces and data presentations.

“In many cases, HTML5 can work just as well as a native approach,” said BI Intelligence in a new report on the subject. “But it is not the silver bullet it is often made out to be, for several reasons. HTML5 faces a fragmentation issue of its own, since there are gaps in the range of HTML5 app features supported by the different mobile browsers.”

Monetization is one challenge. There hasn't been a convincing model for HTML5 monetization beyond individual vendors selling their apps online, BI Intelligence noted. The native app stores — Apple's App Store and Google Play — have this model down.  Also, native apps still offer greater ease of access to advanced security features and encryption.

However, HTML5 has a leg up in cross-platform deployment costs, update speed and distribution control, available programming expertise, and in solving fragmentation challenges: Both native and HTML5 face serious fragmentation challenges, but of different sorts. “Ultimately, it's more likely that HTML5 and its cross-platform potential will win out here,” BI Intelligence said.

So where does all of this leave TV advertising? Likely not out in the cold. It still accounts for more than one of every three ad dollars spent worldwide, according to a new white paper from SpotGenie Partners. TV is estimated to capture $68 billion in total U.S. spending and 39 percent of total share through 2015.

Overall ad spending worldwide rose 3.3 percent from January to September in 2012, with TV advertising up 4.3 percent during that period. In North America alone, there was high double-digit growth in TV advertising, up 13.6 percent in the third quarter of 2012 from Olympic and political advertising.

The rise of social media and second-screen usage is also bolstering traditional TV advertising. "Many predicted that online video viewing, made possible through services like Hulu (News - Alert), YouTube and Netflix, would take viewers from traditional TV," SpotGenie noted. "But it seems we have an insatiable appetite for media, with more people interacting online about their favorite TV shows. While Americans still spend most of their leisure time in front of a television set, 40 percent are now on the Internet at the same time, holding a second screen like a smartphone or tablet."

Social media as well as online discussion forums and second screen apps are driving traditional TV engagement. "The social TV phenomenon is providing entertainment and advertising professionals with an immediate feedback loop and a new way to understand viewers' preferences," said the whitepaper authors. "Today's advertisers are realizing the advantages of both television and online advertising and are incorporating both into the media mix."