Google currently dominates the overall US mobile ad market, with a 54.5% share of net revenues projected for this year, dropping slightly to 54.1% by 2014 as more competitors enter the market. Online radio service Pandora, which is expected to earn 8.7% of US mobile ad revenues this year, will hold the second-place position until 2013, when it will give that spot up to Facebook. These figures represent net mobile advertising revenues after companies pay traffic acquisition costs to partner sites. Revenues for publishers (such as Pandora, Facebook or Twitter) may come from inventory purchased via ad networks (such as Millennial Media or iAd). eMarketer’s previous forecast from January 2012 represented gross revenues for the companies.
Much of Google’s dominance of the overall mobile market is a result of the company’s strong position in the mobile search ad market, in which eMarketer estimates Google maintains a 95.4% share of revenues—leaving just 4.6% of the $1.28 billion advertisers will spend on US mobile search ads this year for competitors like Microsoft.
Competition among major players will be healthier in the US mobile display ad market, which eMarketer estimates will grow 102% to $1.1 billion this year. On a net basis, Pandora Media has emerged as one of the strongest US mobile display ad sellers, and its share of the total US mobile display market is expected to reach 20.5% in 2012.
Google, which sells mobile ads through its network and on its own sites, is expected to earn an 18.4% share of US mobile display ad revenues this year. Its share is expected to decrease slowly over the next few years as competition grows stronger from Facebook and Twitter. Ad networks such as Millennial Media, Apple’s iAd and Google’s AdMob, each of which pay back a significant portion of their gross revenues to ad publishers and partner sites, maintain an outsize footprint on the marketplace despite taking home a relatively small piece of the net revenue pie.
Despite the growing focus from major ad publishers, mobile remains a relatively small portion of the overall US ad market—representing roughly 1% of total US ad spending in 2012, according to eMarketer—and mobile media buys will remain smaller than those on other digital platforms, particularly as small screen sizes force many display ad publishers to serve fewer impressions per mobile page view.
Still, growth rates for mobile display, as well as search, are expected to remain very strong over the next few years as more advertisers develop infrastructure to support larger mobile ad buys and publishers develop more sophisticated offerings.
Rich media ads are driving much of the mobile display growth, though mobile banner advertising remains a relatively strong contributor too. Mobile video advertising—accounting for just 5.8% of all mobile ad dollars spent in 2012, according to eMarketer—will remain a small piece of the mobile ad market throughout the forecast period.
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Check out today’s other articles, “Twitter Beats Facebook in US Mobile Ad Revenues This Year” and “College Students Rely on Apps to Communicate.”
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