The Mobile Ad Market Is Google, Facebook, and Everyone Else

Source: Getty Images

Source: Getty Images

The mobile advertising industry is getting bigger every year — much, much bigger, according to research firm eMarketer. On Wednesday, eMarketer reported that the mobile ad market grew by 103 percent in 2013 to a total $17.96 billion and that this year to date, the market is on track to grow another 75.1 percent to $31.45 billion.

While an entire industry has evolved around mobile advertising, there are really just two companies that dominate the field: Google (NASDAQ:GOOG) and Facebook (NASDAQ:FB). Combined, the two Internet titans claimed more than 75 percent of new mobile ad spending in 2013 and together claimed more than 66 percent of total mobile ad spending.

Although it seems fair to place Google and Facebook in a league of their own, there is still an enormous difference between the two companies in terms of market share. In 2013, Google claimed a commanding 49.3 percent of total ad spending, while Facebook claimed 17.5 percent. However, Facebook’s share is up from just 5.4 percent the previous year, while Google’s share in 2013 declined from 52.6 percent in 2012.

This is because 2013 was the year in which Facebook successfully monetized mobile, bringing mobile ad revenue up from about 23 percent in the fourth quarter of 2012 to more than 50 percent of total ad revenue in the fourth quarter of 2013. Moreover, Facebook’s share of total mobile ad spending is expected to increase to 21.7 percent in 2014, while Google’s leading position is expected to erode to 46.8 percent.

Facebook’s aggressive growth in mobile ad revenue is a huge positive for the company. At Facebook, more than 45 percent of net ad revenues in 2013 came from mobile, and eMarketer expects this share to increase to more than 63 percent in 2014, making Facebook a truly mobile-focused company. Meanwhile, mobile ad revenue accounted for 23.1 percent of net ad revenue at Google in 2013. This share is expected to increase to about 33 percent in 2014, but Google relies less heavily on mobile than Facebook.

Twitter (NYSE:TWTR), not to be left out, claimed 2.4 percent of total mobile ad spending in 2013 and is expected to claim 2.6 percent in 2014. The social platform posted total revenue of $664 million in 2014, small change compared to its competitors, and a full-year net loss of about $645 million.

Twitter is expected to become an increasingly significant player in the mobile ad space, but for now its reach is small enough relative to Google and Facebook that it isn’t expected to join the two in the top tier. Twitter claimed mobile monthly active users of 184 million in the fourth quarter of 2013, which represents about 76 percent of total users.

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