Facebook, Publishers Make Inroads On Mobile Ad Networks

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The U.S. mobile ad market grew 88% last year to $4.5 billion, driven by publishers ramping up business on the mobile side including Facebook, Twitter and Pandora. At the same time, mobile’s share of digital advertising increased to 11% from 7% in 2011.

Mobile advertising is projected to rise 55% to 65% this year to $7 billion, with the growth rate slowing as the base gets bigger. Where ad networks such as Google, Millennial Media and Apple once dominated mobile display, Facebook and other mobile-centric properties are now the category leaders, according to new findings by IDC.

Facebook was tops among mobile publishers in display advertising, with $234 million in gross revenue, followed by Pandora ($299 million) and Twitter ($117 million). Among ad networks, Google led the way with $243 million in revenue. Millennial Media overtook Apple  (iAd) for the No. 2 spot, at $151 million, followed by Apple ($125 million) and Jumptap rounding out the top four ($90 million).

"Mobile ad networks are losing market share to publishers, and we expect them to lose even more going forward," says Karsten Wiede, who leads consumer research at IDC. "Networks, especially independent ones, are entering a difficult phase -- in which, with an ever smaller share of revenue, they'll have to compete with publishers, which will only grow in strength."

Among independent, privately held ad networks, Jumptap has indicated that it is considering an iIPO or selling itself to help gain a larger share of the mobile ad market.

IDC found that display increased its share of overall mobile ad spending by eight percentage points, to 39%, while search ads had gross revenue of $2.2 billion, for a 79% share. Marketers spent a total of $2.8 billion -- up from $1.6 billion in 2011 and $700 million in 2010.

A separate study from eMarketer released last week also found that Facebook moved past Google in mobile display, taking a 21% share compared to 17% for the search giant. The research firm ranked Google as the overall mobile ad leader last year, with revenue of $2.2 billion. eMarketer estimated the U.S. mobile ad mobile ad market at $4.1 billion in 2012, with revenue projected to reach $7.3 billion this year -- roughly in line with the IDC forecast. 

 

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