Mobile Internet Ad Revenue Grows 100% in 2012, Google Has 53% Market Share

One of the obvious problems with Internet Bubble Era revenue models was that so many application providers believed “advertising” would provide the revenue. 

These days, application providers tend to think commerce and transactions are equally important, which is a good thing, since advertising revenues for Internet and mobile apps tend to be highly concentrated.

Google, for example, earned more than half of the $8.8 billion advertisers worldwide spent on mobile Internet ads in 2012, representing 33 percent of all digital ad dollars spent globally, according to eMarketer.

Google also garnered 52 percent of all global mobile advertising revenue in 2012, and will do better than that in 2013, eMarketer predicts.

Altogether, just  three companies—Google, Facebook and Twitter—account for a consolidating share of mobile advertising revenues worldwide, as other players, such as YP, Pandora, Apple and Millennial Media, see their shares decrease, despite maintaining relatively strong businesses growing at rapid rates, eMarketer says.

Across all digital platforms, Google continues to reign as not only the largest beneficiary of digital ad spending in the US, but worldwide as well, eMarketer  estimates.

Google earned $32.73 billion in net digital ad revenues in 2012, equivalent to nearly 32 percent of total worldwide digital ad spending that year.

In 2013, Google will increase revenues faster than the overall market.

Facebook came in second in 2012 with $4.28 billion in net digital ad revenues, or four percent of the worldwide market. Its share will also grow to five percent in 2013, eMarketer predicts.

While both Google and Facebook are increasing revenues at faster rates than the overall digital ad spend market, dramatic increases in ad revenues are more difficult for companies with substantial existing earnings.

Twitter will post the fastest growth rate in worldwide ad revenues among the companies eMarketer analyzed, with a 102 percent increase expected this year after a 107 percent increase in 2012. The market will grow about 12 percent in 2013, by way of comparison.

Overall online ad spending, like mobile advertising, continues to consolidate among a few major ad sellers. In 2011, eMarketer estimates, 55.6 percent of all digital ad revenues worldwide went to companies in the “other” category. By the end of 2013, that share will drop to 52 percent.

The point is that the stock answer that “advertising” will be the primary revenue model for most application providers likely to prove quite unrealizable. Yes, the markets are growing, but most of the revenue will be captured by just a few firms.