Global Mobile Ad Spend Jumped 105% In 2013, On Track For $31.5B In 2014 Led By Google, Says eMarketer

Next Story

Titanfall For Xbox 360 Pushed Back Again, Now Launching On April 8th

As more people turn away from PCs and turn to smartphones and tablets for their online fix, the market for mobile ads continues to shift, too. Figures out today from research firm eMarketer note that mobile ad revenues surged 105% in 2013 to bring in nearly $18 billion in sales.

It predicts that 2014 will see more modest growth, up 75% to $31.5 billion. Crucially, mobile ads are finally breaking through into meaningful shares of overall digital spend, and will account for nearly one-quarter of it this year.

When it comes to who is leading the mobile ad charge, Google very much remains at the top with eMarketer projecting that it will represent 46.8% of all revenues this year, although its position is diminishing, with Facebook picking up steam to account for 22% of mobile ad sales in 2014. No surprise, considering that last quarter was the first that Facebook, with its 945 million monthly active users on mobile, made more from mobile than desktop ads — 53% of total ad revenues to be specific. In 2012, it was only 12%. “The rapid pace in which mobile has taken over the company’s ad revenue share indicates Facebook’s mobile future,” eMarketer writes.

Not unlike the division of riches in the smartphone world, after the two biggies, the shares drop dramatically. Twitter, eMarketer predicts, will take 2.6% of all mobile ad revenues in 2014, followed by Pandora at 1.7% — impressive for the music streaming company, considering that it has made little move to expand significantly outside of the U.S.

Significantly, iAd and Apple do not appear big enough to have been broken out in the rankings. Apple recently made an interesting acquisition of Burstly, which offers an app testing product called TestFlight but also an ad mediation product and related services under the Skyrocket brand. It will be interesting to see whether Apple decides to use this technology to expand its iAd platform. So far, Burstly has issued existing customers of Skyrocket publishing termination notices, but with no detail about what that will mean in terms of the product and its future.

One interesting trend to note for the longer term is that while we are still seeing healthy growth in mobile ads, it’s also slowing down. 2018, eMarketer believes, will see revenues of nearly $95 billion from mobile ads, but the growth of 105% that we saw in 2013 will be long gone: the market in 2018 will only see expansion of 22%:

Why the decline of mobile ad growth? Two reasons, most likely. The first is the inevitable slow-down that comes as the medium matures. The second is a bit more interesting: the rise of other revenue models.

Specifically, consider companies like Supercell and King.com, mobile gaming giants that are throwing off huge amounts of cash ($5 million/day on average for Supercell in 2013) on free games that are built around in-app purchases of extra features, not advertising.

That speaks to a clear appetite for paid content that not just gaming apps but others will likely try to leverage in the years ahead, in contrast to recent years where free, ad-supported apps felt like nearly the only game in town.

Image: Flickr