More evidence that traditional ad models are challenged

By September 14, 2015Advertising, Facebook


Figures are in billions. 2015 figures are projections for the full year.

I’ve long thought that overload of messages in our lives is leading to ad-blindness and that paid business models are increasingly more attractive. This chart I just saw on Techcrunch re-enforces that view.

In-app purchases are still a relatively new phenomenon and many companies and industries are still figuring out how to get the most from them. Games makers have got it down pat now, but other content companies not so much. There’s still lots of growth to come.

Mobile ads I’m not so sure about. Large properties with sophisticated targeting will continue to do well and it will be interesting to see where Facebook, Twitter, and the big messaging companies go next. Smaller properties and the various ad networks they work with may have a tougher time, particularly now Apple has enabled ad-blocking in iOS 9.

Note that Facebook’s mobile ad revenues were $2.9bn in Q2 and are growing 60% year on year. If you backed them out of the purple bars in the chart above then there wouldn’t be much growth left.

  • The interesting thing is that Apple’s decision will prompt more brands to develop their own apps or add value to the apps that have most traction. Either way, Apple wins because users are happy (they can choose the experience they want) and Apple continue to own the entire, creative value chain. #genius

  • I sort of agree but worry about the phrase “paid business models”. I agree that more companies will make more of their revenue from getting customers to give them money. But “paid” often implies “pay upfront”, in contrast to the free business models we have seen. Many people (particularly journalists) seem to think that if it isn’t paid-for upfront, it must be upfront. This is not the case for games, nor for many Software-As-A-Service businesses.

    So I agree that ad-funded may not be the future. But for many businesses having a free service with a clear path to paying, preferably with a variable pricing component, seems likely to be important.

  • Agreed! Companies have got to make money 🙂 And Apple definitely wins. They take a cut of in-app purchases, but not a cut of ads.