Google Widens Its Lead In Mobile Ads; Bulk Of Money Is Online, Not In Apps
Google (NSDQ: GOOG) announced in Q3 that it was on track to make $1 billion in mobile advertising this year; now figures just out from IDC really bring home just how far ahead it is from the rest of the pack: Google accounts for 59 percent of all mobile advertising revenue in the U.S., with the next-closest competitor, Apple (NSDQ: AAPL), coming in with just an 8.4 percent share of the market, worth $877 million overall.
What’s notable about the figures is that although a lot of talk about mobile media today is focussed around apps, this is not where the majority of money is coming from in mobile advertising. IDC estimates that of Google’s $1 billion in mobile ad revenues, only about $150 million is coming from apps, another portion from licensing fees, and the “bulk” coming from mobile web, in the form of display and search ads.
(If anything, it seems that there is big money to be made from in-app advertising, but only for the very most popular apps. Witness the reports that the free, ad-supported version of Angry Birds is expected to make developers Rovio $1 million per month in advertising revenues by the end of this year.)
Google’s share represents a jump of 10 percent on last year’s 48.6 percent - a result of the growing use of smartphones (and hence mobile web), the growth of the Google-backed Android platform, and the $750-million acquisition of AdMob in November 2009.
Apple, which itself bought mobile ad network Quattro Wireless in January for $275 million, was not ranked 2009. Other big gainers included Millennial Media, which ended the year at 6.8 percent compared to 5.4 percent the year before.
The IDC report, quoted in Bloomberg Businessweek, also notes that both Yahoo! (NSDQ: YHOO) and Microsoft (NSDQ: MSFT) are losing market share and will end at 5.6 percent and 4.3 percent respectively.
How will these numbers evolve in the year ahead? It’s likely that with the growing ubiquity of Android devices that Google’s share in the market will inevitably rise, too. Meanwhile, the impact of premium-priced iAd advertising will certainly grow revenues for Apple, but given that those ads will only run on Apple devices, that potential for growth may be limited.
What of the other smartphone platforms? How will they impact mobile advertising? Not clear whether, for example, a Windows Phone 7 effort will ultimately translate into Microsoft gaining market share in mobile advertising. But in any event, the growing ubiquity of smartphones will make it a more attractive medium for businesses to invest their marketing dollars.
To that end, IDC believes that in 2011 the mobile advertising market in the U.S. alone may be worth $2 billion, with some five percent of online marketing budgets going into mobile, compared to three percent this year.
Still, one should always take analysts’ numbers with a gain of salt: IDC released figures to Businessweek earlier in the year that estimated Google and Apple would end the year more or less level in the market, a prediction that IDC had to revise as the gulf between Google and the rest seems to be growing ever wider.
Source: http://moconews.net/article/419-google-widens-its-lead-in-mobile-ads-bulk-of-money-is-online-not-in-app/
What’s notable about the figures is that although a lot of talk about mobile media today is focussed around apps, this is not where the majority of money is coming from in mobile advertising. IDC estimates that of Google’s $1 billion in mobile ad revenues, only about $150 million is coming from apps, another portion from licensing fees, and the “bulk” coming from mobile web, in the form of display and search ads.
(If anything, it seems that there is big money to be made from in-app advertising, but only for the very most popular apps. Witness the reports that the free, ad-supported version of Angry Birds is expected to make developers Rovio $1 million per month in advertising revenues by the end of this year.)
Google’s share represents a jump of 10 percent on last year’s 48.6 percent - a result of the growing use of smartphones (and hence mobile web), the growth of the Google-backed Android platform, and the $750-million acquisition of AdMob in November 2009.
Apple, which itself bought mobile ad network Quattro Wireless in January for $275 million, was not ranked 2009. Other big gainers included Millennial Media, which ended the year at 6.8 percent compared to 5.4 percent the year before.
The IDC report, quoted in Bloomberg Businessweek, also notes that both Yahoo! (NSDQ: YHOO) and Microsoft (NSDQ: MSFT) are losing market share and will end at 5.6 percent and 4.3 percent respectively.
How will these numbers evolve in the year ahead? It’s likely that with the growing ubiquity of Android devices that Google’s share in the market will inevitably rise, too. Meanwhile, the impact of premium-priced iAd advertising will certainly grow revenues for Apple, but given that those ads will only run on Apple devices, that potential for growth may be limited.
What of the other smartphone platforms? How will they impact mobile advertising? Not clear whether, for example, a Windows Phone 7 effort will ultimately translate into Microsoft gaining market share in mobile advertising. But in any event, the growing ubiquity of smartphones will make it a more attractive medium for businesses to invest their marketing dollars.
To that end, IDC believes that in 2011 the mobile advertising market in the U.S. alone may be worth $2 billion, with some five percent of online marketing budgets going into mobile, compared to three percent this year.
Still, one should always take analysts’ numbers with a gain of salt: IDC released figures to Businessweek earlier in the year that estimated Google and Apple would end the year more or less level in the market, a prediction that IDC had to revise as the gulf between Google and the rest seems to be growing ever wider.
Source: http://moconews.net/article/419-google-widens-its-lead-in-mobile-ads-bulk-of-money-is-online-not-in-app/
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