Article on LNKD. Spending on Mobile Advertising in the U.S. Projected to Soar to $12 Billion by 2016
Spending on Mobile Advertising in the U.S. Projected to Soar to $12 Billion by 2016
Five Star Equities Provides Stock Research on LinkedIn
NEW YORK, NY--(Marketwire - Oct 26, 2012) - Mobile advertising has become a key focus for the Social Media Industry as companies look to monetize the value of their large user base. Worldwide the total number of smartphones in use in the third quarter was 1.03 billion, a 47 percent increase from third quarter 2011. By 2015, that number is predicted to double to 2 billion units. Five Star Equities examines the outlook for companies in the Social Media Industry and provides equity research on LinkedIn Corp. ( NYSE : LNKD )
LinkedIn is the world's largest professional network on the Internet, with over 175 million members. The company recently announced that LinkedIn 2.0 is now available for BlackBerry OS 6 and above through BlackBerry App World. The company has now begun to allow advertisers to use video ads on their platform LinkedIn Ads.
That is an interesting forecast. They do not explain their logic in the article, however, I have a couple of questions:
1. Where is the advertising going to come from? Companies do not have an infinitely increasing amount of advertising dollars to spend, especially in a tough business environment. We have seen the cannibalization of print advertising for web advertising and the bankruptcy of many newspapers. My guess is that there will be cannibalization of PC-driven advertising to handheld advertising as people continue to convert from using PCs to handhelds. It does not mean that then entire pie will grow at the same rate, if at all.
2. There has been talk that the conversion to handhelds lead to LESS overall advertising dollars because LESS advertising can fit on the size of the handheld screen. If there is that much of an increase in handheld advertising dollars, it would imply a greater overall decrease in advertising dollars for web companies... because of the screen size issue.
3. How does competition figure into this? There are now many, many, many potential advertising outlets on the web and what typically happens is that that as competition increases and the market saturates, the price declines. Will there be more handheld advertising, but the average price and hence the average profitability decrease? I do not know, but it is logical that it might.
I often wonder at the intelligence of people who look at headlines and then do not bother to ask the question: "why", or think about other implications.