There has been a lot of discussion in industry circles lately about the future of mobile advertising. A few weeks ago I wrote a post for CEM claiming that consumers would make $1 trillion in purchases from mobile ads by 2017. It might seem hard to believe, but if you follow the money, you’ll see that mobile ads are picking up the pace. It might be time to start seriously paying attention to mobile advertising for your clients.
Following the Money
Yesterday, research firm eMarketer released its report on this year’s trends in mobile advertising, as well as its predictions for the future. eMarkteter found that this relatively untapped source of advertising “is growing more quickly than previously expected.” The market is looking at a 180% increase in spending in the U.S, compared to last year’s numbers.
Revenues from mobile ad sales are also increasing faster than expected and guess who the biggest winners are: Facebook and Google. Alexei Oreskovic for Reuters writes that “Google is expected to remain the top player … with revenue reaching $6.33 billion in 2014.” This year alone, their mobile ad revenue will be up by about 84%, close to $4 billion. The recent dominance of Android-based mobile platforms boosts Google’s mobile revenue well above the rest.
Facebook, coming in a distant second, has made a great deal of progress. As Lauren Indvik for Mashable reports, “Facebook’s mobile ad unit grew from 0% to 14% of total ad revenue in just six months.” Now, they collect over $3 million per day from mobile ads, with the year-end amount projected to reach $339 million. Facebook also has the unique advantage of integrating mobile ads into the actual service they provide on mobile platforms. Sponsored stories and promoted posts are hybrid ads which, are half Facebook content and half traditional advertisement. This will likely be an advantage for the company moving forward.
The Future of Mobile Ads
As the post I linked to above demonstrates, there is certainly a market for companies to buy into for mobile ads. Remember, the $1 trillion in purchases from mobile ads is only 2.5% of the potential income mobile platforms can bring in based on the numbers in use. With this latest news, getting into the mobile ad game sooner rather than later is looking like a better idea for your client each day.
eMarketer predicts that mobile ad spending in 2013 in the U.S. alone will hit $7.19 billion. That number is expected to grow to over $20 billion by the time 2016 rolls around. Mobile ads are not the next big thing in advertising – I don’t want to imply that. Ad spending is still dominated by print, online, and television ads. Mobile ads – as a share of total ad spending – sit at 2.4% of market share for advertising, but by 2016 will reach upwards of 11%. That’s a very significant increase.
At the very least, it’s worth examining the options your clients have for taking advantage of mobile advertising. These aren’t massive marketing or advertising campaigns; you really don’t have a lot to lose. However, as the market increases, your clients do have a lot to gain. Keep in mind that Twitter, Apple, and other big tech companies like Amazon have their hands in the mobile ad pie. Those companies, combined with Facebook and Google, have a lot of potential to reach many more users. Don’t let your clients miss out on an opportunity that could help them in the long run.
Do you think mobile ads will continue to grow rapidly? Do you see mobile ads being a part of your client’s strategy?
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