The Strategist

Google and Facebook control half the US mobile advertising market

06/23/2016 - 16:14

By the end of 2015, Google and Facebook have taken 52.3% of the US mobile advertising market, reports eMarketer. Google’s share was 32.9%, or $ 10.02 billion, and Facebook ceized 19,4%, or $ 5.9 billion. Twitter is on the third place with a share of 3.8%; Yahoo and Apple occupy the fourth and the fifth positions with share of 2.9% and 2.6%, respectively. EMarketer estimated that volume of all US mobile advertising market was around $ 30.5 billion last year.

In 2016, share of Google and Facebook in this market will decrease slightly - to 31.7 and 19.2%, respectively. In 2017, they will amount to 31.7 and 20.3%. This year, all American market will rise to $ 42.01 billion, in 2017 - to $ 50.8 billion.

Google remains the undisputed leader of the entire online advertising market in the US. In 2016, it will receive $ 2 from $ 5 in advertising revenue, according to eMarketer’s report. However, Facebook, Twitter and smaller players are most likely to gradually win the market share back, biting off approximately 5% of Google’s advertising revenues annually until 2017. Now, Google occupies 40.1% of the total online advertising market in the United States, the volume of which in 2015 amounted to $ 58.12 billion. Share of Facebook accounted for 13.2%.

It turns out that Google's share of the market as a whole is twice more than that of Facebook. As for mobile advertising, the difference between the two Internet giants is less. Facebook is expected to increase its share in the US due to targeting audiences. This will allow advertisers to have direct contact with the social network’s users, says eMarketer’s analyst Martin Utreras.

Despite the fact that Google will keep lead in the mobile advertising market in 2017, Facebook’s share of will grow. Since Facebook's upturn will be more intense, difference between the advertising revenues of the two companies will be reduced in the coming years, predicts eMarketer. 

Facebook is successfully monetizing its mobile audience - it brings the company about 78% of all advertising revenue. eMarketer forecasts that by 2017, its share in Facebook will grow to 85%. This trend will be backed up by new services purchased by Facebook, such as Instagram. This year, the mobile photo service will earn $ 570 million on advertising. In 2017, the number will increase more than four-fold - to $ 2.39 billion, or 28% of Facebook's advertising revenue. EMarketer also predicts that, thanks to the social network, Instagram can widen its share in the market of banner advertising.

According to Zenit Optimedia advertising group, mobile advertising sales worldwide are soon going to overtake desktop ads (on conventional PCs and laptops). Already this year, they will reach $ 99.2 billion versus $ 97.4 billion.

At the same time, Priori Data and Pagefair noted significant growth of mobile users using ad blockers in browsers of their devices. Currently, 21% of the 1.9 billion smartphone users around the world - 419 million people - are blocking mobile Internet advertising. Emerging markets are the most active when it comes to getting rid of unwanted ads - 36% of smartphones in the Asia-Pacific region have such applications installed. In turn, mobile advertising blockers in Europe and North American are not used so massively. As of March 2016, only 14 million smartphones in these countries used the ad blockers. 

Researchers have noted a significant increase in the popularity mobile ad blockers. Compared to 2015, number of users worldwide has almost doubled. Browsers with integrated mobile advertising lock are most prevalent in China (159 million users have installed these apps), India (122 million), Indonesia (38 million).

The concern shared by participants of the advertising and media market. Head of the World Federation of Advertisers Stephan Loerke commented: "We have received a loud and clear message - more and more people are dissatisfied with online advertising, so they are" voting with their feet". The advertising industry needs to quickly figure out what makes people tick, and find a way to solve this problem. Brand owners should play the leading role in this task".