New mobile advertising data – market growing fast, Google and search dominate

By January 26, 2012 No Comments

US Mobile Ad Spending, 2011-2016 (billions and % change)eMarketer released some new data yesterday with the most detailed breakdown of the mobile advertising market I’ve seen to date. eMarketer have a history of being amongst the most bullish on this market. They were the first company to predict that 2011 mobile ad spend would top $1bn in the US, and they are predicting big growth again for 2012. Their new figures predict US mobile ad spend will reach $2.6bn in 2012, 80% up on the 2011 figure of $1.45bn (which was significantly higher than the $1bn eMarketer had forecast). Moreover, as you can see from the inset chart there is significant growth still to come.

For those of you who are sceptical about analyst forecasts eMarketer published a table which shows how different firms see the mobile advertising market. The eMarketer figures are roughly 2x the lowest estimates.

The new information for me was which companies have the leading market share and how the market breaks down between different advertising formats.

Search accounted for 45% of the market in 2011 ($653m) and the share of search is expected to rise to around 50% in the coming years. Google dominates search with around 95% market share. I’m not sure I’ve ever done a mobile search with a search engine other than Google.

Display was 31% of the market in 2011 ($445m) and the share of display is expected to rise to 37% over the next five years. Google also has the largest market share in display, but at 25% their position is not unassailable. Millennnial Media (who recently filed for IPO) and Apple’s iAd are equal second, each with around 18% market share.

If you’ve been reading this blog over the last week or so you will have seen that DFJ Esprit recently invested in StrikeAd, which plays in the display segment of the mobile advertising market. The interesting sub-trend within that market is the shift towards exchange traded media. As far as I’m aware there are no analysts forecasts for how mobile display splits between exchanges and ad networks but from our work we estimate that around 10% of mobile impressions are currently exchange traded, but we expect that to rise to around 50% of impressions over the next year or two.

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