Mobile Ad Trends Might Help Facebook In Fight Vs. Google
Strong buying of smartphones and tablets will fuel a 19% increase in mobile advertising revenue worldwide this year, says research firm Gartner in a report Thursday.
Global mobile ad revenue will reach $11.4 billion, up from $9.6 billion in 2012, and rise to $24.5 billion in 2016, according to the report.
The anticipated growth will come from "new opportunities for app developers, ad networks and mobile platform providers," among others.
Mobile ad growth is increasingly essential for revenue growth at Facebook (FB), where about half its users actively spend time on mobile devices. Facebook reports fourth-quarter earnings on Jan. 30. A research report from Jefferies said it expects a strong quarter, "as we have confidence the company's advertising business is performing well, especially in mobile.
To the extent that Facebook can establish a strong presence in the mobile ad market, that poses a challenge to Google (GOOG), which also will increasingly rely on mobile advertising, wrote Brian Wieser, an analyst at Pivotal Research Group, in a recent report.
The growth in mobile advertising comes in part at the expense of print formats, especially local newspapers, Gartner said.
"Smartphones and media tablets extend the addressable market for mobile advertising in more and more geographies as an increasing population of users spends an increasing share of its time with these devices," said Gartner analyst Andrew Frank in the report.
Historically, trends in mobile emerge first in Japan and South Korea — both big users of mobile devices — then extend to the U.S. and Europe. By region, Asia-Pacific plus Japan will account for 42% of mobile ad revenue spending in 2013, followed by North America at 28%, says Gartner. The research firm sees China and India contributing increasingly to mobile ad growth due to an expanding middle class.
Gartner's report says different types of mobile advertising are evolving in different directions. It says mobile display ad spending, important to Facebook, will grow at the expense of mobile search, which is dominated by Google. Facebook is encroaching on Google's territory in other ways. On Tuesday it announced a new search feature, as IBD reported.
