Mobile Advertising Is a Whole Different Ball Game
A new report from IDC has pointed out that revenue made from ad networks fell behind ad revenue from mobile publishers, such as Pandora (NYSE:P), Facebook (NASDAQ:FB), and Twitter, each of which handle their own respective advertising. IDC noted though, that this was not a gradual, drawn out shift — it happened quite rapidly, with independent app publishers’ ad revenue share jumping from 39 percent in 2011 to a majority 52 percent split in 2012, AppleInsider reported.
Mobile ad revenue as a whole lept from $630 million in 2011, to $1.7 billion in 2012, more than doubling year-over-year. However, the ad revenue brought in by the four largest mobile ad forces — Google (NASDAQ:GOOG), Millennial Media, Apple’s (NASDAQ:AAPL) iAd, and Jumptap — grew by only 47 percent during that period. That’s still significant growth, but not proportional to the market as a whole.
“Mobile ad networks are losing market share to publishers, and we expect them to lose even more going forward,” said Karsten Weide, Vice President of Media & Entertainment at IDC. “Networks, especially independent ones, are entering a difficult phase, in which, with an ever smaller share of revenue, they’ll have to compete with publishers, which will only grow in strength.”
However, as AppleInsider keen to point out, it was Weide who was convinced that Apple’s iAd would eventually fade into obscurity a year ago, and rather than doing so, it grew 30 percent with revenues shifting from $95 million to $125 million. Instead, Weide commented that Millennial Media overtook Apple for the number two slot, and that this year Apple has been closing the gap between itself and Millennial…
Analyst forecast technicalities aside, the data does show that mobile publishers are finding their own paths, whereas on the web, Google was able to take advantage of more traditional media’s failure to monetize itself.
“When you look at a mobile phone, it’s not like the desktop,”said Steve Jobs, the late Apple CEO and co-founder, when presenting iAd in 2010. ”On the desktop, search is where it’s at. That’s where the money is. But on a mobile device search hasn’t happened. Search is not where it’s at! People aren’t searching on a mobile device like they are on a desktop,” He continued. ”What’s happening is that they’re spending all their time in apps. When people are looking for a place they want to go out to dinner they’re not searching. They’re going into Yelp. They’re using apps to get the data on the internet rather than a generalized search. And this is where the opportunity to deliver advertising is. Not as part of search but as part of apps.”
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