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Google to competitors in mobile advertising: You can't touch this

June 13, 2013|By Jessica Guynn
  • Google Android display at Google developers conference in 2012.
Google Android display at Google developers conference in 2012. (Paul Sakuma / Associated…)

SAN FRANCISCO -- When it comes to online advertising, Google long ago established itself as the Internet equivalent of Boston Celtics superstar Bill Russell.

Now it's looking to extend that championship dynasty to mobile devices. And a report released Thursday shows it's already towering head and shoulders above its rivals.

Google will sell more mobile ads than all of its competitors combined for the second straight year, according to a forecast from research firm EMarketer on global digital advertising sales.

EMarketer projects that Google will make nearly $8.9 billion in mobile ad revenue this year after paying commissions to partners. That's a 56% share of the overall mobile ad market.

In 2012, Google had 52% of the market, or $4.6 billion. Mobile ad sales are expected to hit nearly $16 billion this year.

EMarketer also forecast that Google's total take of the digital ad market including personal computers would reach nearly $39 billion, a 19% jump from last year and one-third of the nearly $117-billion market. Facebook comes in second with 5% of the market. Yahoo is third with 3%, according to the EMarketer forecast.

As for Twitter, its ad revenue is expected to reach $600 million this year, with about half coming from mobile devices, EMarketer said.

Ecommerce giant Amazon.com is carving out a spot for itself in advertising sales. It ranked seventh in online ads with a projected $840 million in sales, up from $610 million last year, EMarketer projected.

Bottom line, says EMarketer: Google rules. It gets one out of every three dollars spent on digital advertising—and one of every two on mobile.

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Though it has been making progress in hawking mobile ads, Facebook will still come in a distant second with about $2 billion in mobile ad revenue, eMarketer projected. Last year, Facebook sold less than $500 million.

Facebook's increased focus on ads for smartphones and tablets has helped boost its stock –- but not enough for Wall Street. Facebook has not closed above its $38 initial public offering price since its first trading day. Facebook Chief Executive Mark Zuckerberg faced shareholders' wrath this week at the company’s first shareholder meeting.

Upstarts are starting to gain some ground, EMarketer says. Pandora came in third in the EMarketer report with $400 million in mobile ad revenue, followed by Twitter with $310 million.

With the explosion of smartphones and tablet computers, mobile advertising is the holy grail for Internet companies. The EMarketer report overwhelmingly hands the advantage to Google.

The technology giant can credit some of that lead to its $681-million purchase of AdMob – one of the first mobile advertising startups -- in 2010.

Its products are also popular on mobile devices such as digital maps, Gmail and the Chrome browser. The Mountain View, Calif., company benefited from an early partnership with Apple’s iPhone and went on to strengthen its position with its Android mobile software that now powers more than 900 million mobile devices.

Internet companies including Google have been struggling to make the transition to mobile devices as more and more people use them to search for a dining spot, check their email or share updates with friends. So far advertisers have resisted paying as much for mobile ads as they do for ads on personal computers, and that has led to a decline in Google’s average advertising prices.

The report sheds some light on how successful Google has become in mobile ads. The company does not break out how much of its advertising revenue comes from mobile devices.

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