Mobile advertising has taken some time to gain traction. As late as September 2012, eMarketer analysts were predicting a total ad spend of about $2.61 billion for the format. It turns out they underestimated the success of ‘native’ ads – popular in social media sites – and, as a result, the projections for 2013 mobile ad spending have been bumped up significantly.
After Facebook rolled out mobile newsfeed ads and Twitter introduced Promoted Products, marketers showed a great interest in these formats. The platform providers were able to generate revenue through the mobile channel largely because consumers are turning to mobile devices for more of their online time. Total mobile ad revenue in 2012 reached the $4 billion mark which is a 180% increase over the previous year. eMarketer’s revised mobile ad spending figures for the next few years, along with the percentage increase, look like this:
- 2013 $7.19 billion (77%)
- 2014 $11.14 billion (55%)
- 2015 $15.82 billion (42%)
- 2016 $20.89 billion (32%)
Not surprisingly, the top providers in this format will battle for market share with Google maintaining the lead at 57.1% in 2013. Facebook should capture 12.2% of revenue this year, Pandora will earn 5.9% and Twitter will account for 3.5%. One reason for Google’s dominance in the market is its ownership of mobile ad revenues linked to search. In 2013, mobile search spending will reach $3.6 billion and Google will control 92% of that amount. The battle for mobile display is much closer with Facebook controlling 25.2% and Google at 19.6%.
In 2013, mobile ad spending will comprise only 4.2% of the total media market. But, by 2016, analysts predict that the mobile ads will account for 11% of the market and at that point will be larger than radio.[Source: Unexpected Growth from Facebook, Google Lead to Significant Uptick. Emarketer.com. 17 Dec. 2012. Web. 7 Jan. 2013]