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US Mobile Ad Spending Jumps to $4 Billion

Google keeps more than half of US mobile market

US mobile ad spending is growing faster than previously expected, due in large part to the success of so-called “native” ad formats like Facebook’s mobile newsfeed ads and Twitter’s Promoted Products. These products represent a seamless experience across platforms for consumers—which means platform owners are able to successfully earn (or, in some cases, not lose) revenue as consumers continue to increase time spent on mobile devices with smaller screens unsuited to the bulk of desktop display advertising inventory.

eMarketer expects overall spending on mobile advertising in the US, including display, search and messaging-based ads served to mobile phones and tablets, to rise 180% this year to top $4 billion. eMarketer’s previous forecast, made in September 2012, was for substantially slower growth of 80%, to just $2.61 billion. Now eMarketer expects US mobile ad spending to reach $7.19 billion next year and nearly $21 billion by 2016, a significant upward revision.

Facebook’s Q3 mobile performance is one major reason for the change. The social networking giant offered no mobile ad opportunities at the beginning of 2012 but grew its mobile business at an astonishing—and unexpected—rate. Before Facebook’s Q3 earnings call, most researchers and analysts expected US mobile ad revenues of roughly $45 to $100 million, according to figures examined by eMarketer. While the company’s total ad revenues were, for the most part, unsurprising, the share of revenues attributed to mobile advertising was far from it.

eMarketer, which bases its figures on a meta-analysis of data from research firms, investment banks and other sources on ad revenues, ad impressions, ad pricing and other factors, now estimates Facebook’s US mobile ad revenues will hit $339 million in 2012.

Google also posted better-than-expected mobile ad growth in Q3. Fueled primarily by direct-response advertisers, Google is set to control a 56.6% share of the US mobile advertising market by year’s end, eMarketer estimates.

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Check out today’s other articles, “Native Mobile Display Ads Mean Big Bucks for Facebook” and “Smartphones Speed the Digital Revolution in India.”

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