Facebook, Pandora and Twitter seize mobile ad display market
An IDC study finds that major publishers have wrested mobile display ads away from advertising networks
IDG News Service - An IDC study has found sweeping changes in how mobile display advertisements are sold, with Facebook, Pandora and Twitter successfully wresting away control from advertising networks over the last year.
Advertising networks, which sell online advertising for publishers, controlled the market for mobile display advertisements until 2012, according to IDC's report, released on Tuesday. But then it drastically changed.
"In display ads, the era of ad network dominance has come to an end," IDC said. "New mobile ad budgets flow more easily into the coffers of publishers than into those of networks."
IDC attributed the change in part to sales of tablet computers, which have attracted more brand advertisers directly to high-quality publishers. Growth in mobile traffic also allow publishers to run their own sales teams rather than use advertising networks.
Interestingly, most of the leaders in mobile display advertising weren't selling any mobile display advertisements in 2011, IDC said. Facebook, which secured the number one spot, only started selling mobile advertisements in the second quarter of 2012.
Mobile display ads accounted for $1.7 billion of spending in 2012, up from $700 million the year before.
Facebook and its closest competitor, Pandora, netted more than $200 million in display publishing in 2012. Twitter came in third with more than $100 million in net revenue, followed by AOL, The Weather Channel, Microsoft and Yahoo, according to IDC. Pandora was the only company selling mobile ads of all of those companies in 2011, IDC said.
Facebook will likely keep its top spot ahead of Pandora this year, IDC said. But it said Twitter's prospects "of very strong growth are more doubtful given the very hard time the company seems to have to monetize the service."
In search advertising, Google remains dominant, controlling some two thirds of that market, IDC's report said.
"We do not see how anything that Microsoft or Yahoo could do would erode Google's dominance in the short term," the report said. "The only potential source for disruption would be if Facebook entered the search advertising space in earnest -- as IDC believes it should -- perhaps with Microsoft providing the technology."
IDC expects mobile advertising spend to reach $7 billion this year, up from $4.5 billion in 2012. It remains the fastest-growing digital advertising format, IDC said.
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