Mobile Ad Spend Exceeds Expectations

Mobile ad spending in the US is growing faster than expected. The total value of the display, search and messaging-based ads dished out to mobile phones and tablets is set to increase by 180 percent in 2012, from $1.45 billion in 2011 to $4.06 billion, by the end of 2012. This is a whopping increase from the start-of-the-year prediction by emarketer.com that mobile advertising would grow only by 80 percent in 2012, to just $2.61 billion.

Mobile Ad Spend Exceeds ExpectationsThe unexpected surge is largely owing to the success of newly launched ad formats such as Facebook mobile newsfeed ads and Twitter’s promoted products. Advertisers have flocked to such ad formats as they allow displaying ads the same way in both mobile and desktop platforms, finally overcoming the major challenge of mobile users unable to view desktop display ads.

The surge started in Q3 2012 when Facebook introduced its mobile ads and surprised industry pundits by attributing a 14 percent share of its total revenue to mobile advertising.

Incidentally, Google also exceeded mobile ad growth expectations in Q3. The challenges posed by Facebook and others notwithstanding, Google retains market dominance in the mobile ad market, with 56.6 percent share of the market and total ad revenues of $2,171.4 million in 2012.

Facebook is a distant second, with a total mobile ad revenue of $339.3 in 2012. Pandora takes third spot with $224.8 mobile ad revenue in 2012. Twitter, with $134.9 million and Apple (iAd), with $123.8 million take fourth and fifth positions.

Emarketer.com has incidentally revised its predictions of total mobile spend for the coming years. It now estimates a total spend of $7.19 billion by the end of 2013, $11.14 billion by the end of 2014, $15.82 billion by the end of 2015 and $20.89 billion by the end of 2016.

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Kathleen Goodwin