Spending on mobile ads is soaring. Worldwide spending on mobile ads is expected to hit $31.5 billion in 2014, according to new figures from eMarketer. That's after a huge 2013, when global mobile ad spending spiked 105 percent to $17.96 billion.
We caught up with Greg Sterling, principal analyst at Sterling Market Intelligence, to get his take on the new data . He told us the numbers may be somewhat inflated.
“However,” he added, “it’s directionally accurate. Marketers and brands have finally gotten religion when it comes to mobile and they're starting to put real money behind it.”
Two Tech Titans Rule
When you slice and dice the data, eMarketer’s results reveal that mobile ad spending will make up nearly 25 percent of total digital ad spending worldwide. And it’s no surprise which companies are benefiting the most: Facebook and Google.
Indeed, the combined net mobile ad revenue of these two tech titans increased by $6.92 billion. The companies staked claim to 75.2 percent of the additional $9.2 billion that went toward mobile in 2013.
What’s more, eMarketer concluded, Facebook and Google are consolidating their positions at the top of the mobile advertising market, together recording more than two-thirds of mobile ad spending in 2013. EMarketer predicts that number will rise at least a little in 2014.
Facebook’s Mobile Front
Although many were skeptical about Facebook’s mobile prospects in the early days, eMarketer figures the rapid clip at which mobile has taken over the social media giant’s ad revenue share points to the company’s mobile future.
For example, in 2012 only 11 percent of Facebook’s net ad revenues worldwide came from mobile. What a difference a year makes. In 2013, that figure jumped to 45.1 percent, eMarketer reports.
Where does Facebook go from here on the mobile ad front? EMarketer estimates that mobile will account for 63.4 percent of Facebook’s net digital ad revenues in 2014. Meanwhile mobile accounted for 23.1 percent of Google’s net ad revenues worldwide in 2013, and eMarketer predicts its share will increase to 33.8 percent this year.
Where Does Google Fit In?
Google may be suffering a bit from another eMarketer revelation: desktop search in the U.S. is poised for a significant decline in 2014 as paid clicks on Google shift toward mobile devices.
According to a separate eMarketer report that hit the market last week, desktop search ad spending increased only 2.3 percent in 2014. And that’s not the worst of it. The firm is predicting desktop search ad spending will decline $1.4 billion in 2014. That’s a 9.4 percent dip compared to 2013 when desktop search ads brought in $13.57 billion. Still, eMarketer is certain that Google will flex its muscle as advertising continues shifting from the desktop to mobile search spending.
“In 2013, 76.4 percent of the company’s search ad revenues came from desktop. However, that share will fall to 66.3 percent in 2014 due to a $770 million decrease in desktop search ad revenues year over year,” the report explained.
“At the same time, the company’s mobile search revenues will increase $1.76 billion, totaling approximately one-third of Google’s total search revenues. Key contributors to Google’s mobile search growth include its Enhanced Campaigns and Product Listing Ads (PLAs), both of which contributed to increased click share on mobile throughout 2013 and will continue to do so," according to the report.