eMarketer Raises Mobile Ad Forecast, Citing Facebook's Rising Fortunes

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emarketer-mobileMobile advertising revenue will still make up a small percentage of total media ad spending, according to digital marketing research firm eMarketer, but the industry is growing at a faster rate than the company forecasted only a few months ago.

In 2012, mobile ad revenues will account for 2.4 percent of total ad spending, and will rise to 11 percent by 2016, eMarketer forecasted, but growth from 2011’s $1.45 billion in revenue is now expected to be 180 percent.

This means mobile ad spending, including search, display, and newer forms of native advertising such as Twitter’s Promoted Tweets and Facebook’s Sponsored Stories, will be $4.1 billion in 2012, increasing an additional 77 percent next year to $7.2 billion, according to eMarketer.

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In September 2012, eMarketer’s previous forecast showed mobile ad spending growing only 80% to $2.16 billion in 2012. The change in eMarketer numbers is attributed to Facebook’s third quarter earnings, which showed that the company made approximately $150 million in mobile advertising revenue. The quick growth in Facebook’s mobile ad platform, in addition to Google’s solid mobile performance in the third quarter, was enough to alter eMarketer’s forecast.

Google continues to dominate mobile search advertising, holding a 93.3% share of mobile search ad revenues in 2012, according to eMarketer. However, overall, Google’s mobile ad revenue share dropped from 62.5% in 2011 to 56.6% in 2012, the company forecasted.

“Search, however, is not enjoying growth at quite the same level as native display formats, though it is growing quickly,” eMarketer wrote in a statement about the mobile forecasts. “Shifting consumer behavior has dramatically increased the volume of mobile searches and paid clicks on mobile devices, but advertisers remain hesitant to pay rates per mobile click comparable to those on the desktop, as mobile searchers are still less likely to convert into purchasers than their desktop counterparts.”

Facebook, which is expected to account for 8.8% of all mobile ad revenues, will hold an 18.4% share of mobile display ad revenues. Additionally, Twitter is contributing to the native advertising trend on mobile, and eMarketer predicts the company will earn $134.9 million in mobile ad revenue in 2012, an increase from its September forecast of $116.8 million.

As mobile advertising continues to change and evolve, it can mean hyper-growth and solid success, or challenges as advertisers, consumers, and tech companies get used to new ad formats. Mobile will solidify its place in the advertising landscape as this industry matures and continues to show growth.

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