We’re using apps on our smartphones and tablets much more to look things up now, according to a new report out from eMarketer. That means a serious drop in ad revenue for many of the major search engines Google, Bing and Yahoo.
According to the report, Google mobile ads saw a dramatic 17 percent drop in revenue from 2012. The search giant owned 82.8 percent of the $2.24 billion search market just two years ago. While the U.S. mobile ad market brought in a whopping $17.73 billion this year, mobile search spending jumped to more than half of that at $9.02 billion — but Google’s piece of that pie dropped to just 65.7 percent.
Basically, we’re on our smartphones a lot more when looking things up than we are on our desktops. And we’re fragmented in the way we search now as well. Google is all search for everything but can’t necessarily tell us in a click the best restaurant or what the price is on a coveted item. We use niche travel apps such as Kayak to look up travel info, Trulia to search for homes and local business search company Yelp to look up local businesses.
A Nielsen consumer report out earlier this year confirms the shift to mobile. We’re spending an average of 34 hours using the Internet on our mobile phones every month compared to 27 hours using the Internet on our desktop.
According to the eMarketer report, we’re really big on local search. Yelp is leading the pack here in terms of ad-revenue growth. Predictions for the local business search company are at 136 percent, or $119 million in mobile ad revenue this year. While that’s a drop in the bucket compared to the spend for Google, Yahoo or Bing, it’s a telling shift in consumer behavior. Revenues are expected to triple by 2016 for Yelp. Meanwhile, Google revenue is expected to drop to 64.2 percent of the overall market by then.
No word yet on what the “other” category is in the report. Also note that this report does not mean Google is losing revenue. On the contrary, it’s still growing — it’s just capturing less of the overall market than it was before. As mentioned above, the total mobile ad spend has jumped by nearly $7 billion in the last two years. That still gives Google close to $6 billion in mobile search ad revenue.
The bottom line here is that niche apps are taking over the way in which we search online, and they’re doing this because we are spending much more time looking things up on mobile devices than we are on our desktops.