Mobile Display Ad Estimates: Social Sites Beat the Networks?

A week ahead of the actual mobile ad numbers from the IAB IDC has released its estimates of 2012 US mobile advertising, as well as projections for 2013. The company says that mobile ad revenues were $4.5 billion in 2012 and will reach $7 billion this year. Our view is that the actual 2012 number will come in just under $4 billion. 

According to IDC, search advertising represented 61% of mobile ad revenues in 2012 or $2.8 billion, while display brought in $1.7 billion or 39%. Directionally those numbers are right though the precise proportions may be off. For example, IDC's estimates of Google's share of search advertising is 79%, which is too low. It's more like 94%. 

The most interesting part of IDC's figures and analysis is its juxtaposition between social networks (publishers) and mobile ad networks. Here are IDC's 2012 mobile ad revenue estimates for the major social networks/publishers (Pandora isn't a social network obviously):

  1. Facebook: $234 million
  2. Pandora: $229 million
  3. Twitter: $117 million

And here are the IDC-estimated mobile display ad-network revenues:

  1. Google: $243 million
  2. Millennial Media: $151 million
  3. Apple: $125 million
  4. Jumptap: $90 million

The argument is that publishers/social networks have beaten the mobile ad networks. Online publishers essentially lost out over time to the ad networks on the PC internet because of traffic fragmentation and limited reach of most publisher sites vs. networks. The question is: will this happen again as real-time bidding and mobile exchanges become established? Or will major sites/publishers retain their ability to capture and control significant mobile ad dollars? 

One point to be made here is that sites like Facebook and Twitter offer a multiplatform solution (and so does Google) that enables marketers to reach users on the PC and mobile simultaneously and usually with a single buy and single ad creative. That represents an efficiency advantage over most ad networks.