Tap into the advertising potential of smartphones and tabletsDate posted: 12/4/14 11:15:00 AM
Smartphones and tablets have become firmly entrenched in day-to-day use throughout society, which is why it shouldn't come as much of a surprise that advertisers are fighting hard for strong mobile-advertising platforms.
Facebook, for example, was lambasted two years ago when it went public with almost no presence in mobile advertising. That soon changed.
Mark Mahaney, an analyst for RBC Capital Markets, told The Wall Street Journal that Facebook has gone on an unprecedented rise after hitting the mobile market hard. It is now considered one of the
top mobile-advertising companies on the planet.
"What Facebook has done with mobile is one of the most impressive things I've seen an Internet company do in recent years," Mahaney said.
The Journal reported that Facebook more than doubled its mobile advertising profits for the ninth straight quarter. In all, roughly 62 percent of Facebook's advertising revenue comes from ads seen on mobile devices. The social media giant is now in a war with Google for the largest stake in mobile advertising. All other companies are a distant third, according to the Journal.
According to eMarketer, a marketing and research company, Facebook is set to own around 18 percent of the 17.7 billion U.S. mobile ad market in 2014, which is a nine percent increase from two years ago. Google owns the biggest share by a wide margin, though that number is starting to fall. Google's expected share of the mobile advertising market is 39.8 percent in 2014. The company once had a stranglehold of 49.8 percent of the mobile ad market.
How can Facebook compete for an even bigger share?
According to Facebook founder Mark Zuckerberg, the social media company is looking for bigger brands to get involved in mobile advertising. Facebook plans to get into premium video advertising, which would be seen on both desktop and mobile devices, the company already has a stake in a new mobile advertising network that places mobile ads outside of its own applications.
Zuckerberg said Facebook plans to find a balance between being patient and aggressive.
"We want to make sure we don't get ahead of ourselves," Zuckerberg said.
Facebook is starting to persuade several large advertising firms to put more resources into Facebook advertising in order to fuel revenue. Zuckerberg said he envisions the recently acquired Instagram to become a strong revenue maker through mobile and desktop advertisements.
The power of mobile advertising
According to a recent report from eMarketer, advertisers will spend more money in 2014 on mobile-device ads than they will spend on newspaper or radio ads. It's the first time that such a change has taken place.
Cheryl Cheng, operating partner with BlueRun Ventures, told Fox News that advertisers are starting to see the untapped possibilities that mobile advertisements are capable of delivering. Still, mobile ads have an extensive road ahead if they plan to catch an advertising giant like television.
"Mobile advertising is a following indicator of where the market is," Cheng said. "The medium for mobile advertising still has a lot of catching up to do before it can even reach - or surpass - the levels of TV advertising."
Show me the money
Mobile-advertisement spending could reach $18 billion by the end of the year, an 83 percent increase, according to eMarketer. Cheng pointed to Verve Mobile, a company using smartphone functions to target specific consumers, as one reason for the rapid increase.
"Those types of advertising units do really well, the ones that leverage that aperture of mobile," Cheng said. "Outside of that, you are still seeing a lot of infrastructure being built out, so that advertisers can use that to validate their spend."
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