Mobile ads' promise eludes Facebook, other businesses

Jun 01, 2012 By Jon Swartz

Mobile ads are the Holy Grail of revenue for anyone with a social-media plan.

The market for the ads that dot smartphone and tablet screens is expected to soar to $10.8 billion in U.S. sales by 2016, from $2.6 billion expected this year, according to research firm eMarketer. That's a tiny slice of the $169.5 billion market for media ad spending in the U.S.

Yet are crucial to the growth of many companies, including newly public Facebook, though few businesses have been able to capitalize on the promise.

Some speculate that the popularity of such devices, in part, comes from their lack of ads. Others think the larger screen expected on Apple's forthcoming is a concession to demands for extra space to accommodate content and ads.

"It underscores the importance of real estate on (mobile) screens," said John Faith, senior vice president of mobile at Whale Shark Media, a leader in online coupons and deals.

Mobile Web traffic is up 35 percent in less than a year, while all Web-browser use on Windows-based PCs declined 10 percent in a six-month period from 2011 to 2012, says Chitika Insights. About 20 percent of traffic comes from tablets and smartphones, it says. Retailers such as Target, and Macy's have noticed, and are charging into mobile ads, which will become staples as millions ditch PCs for smartphones and tablets, ad experts say.

"Everyone 'gets' the implicit contract that free content comes with ads," said Raghu Kakarala, of technology at Engauge, which has helped create mobile app features for Coca-Cola's MyCokeRewards and Chick-fil-A.

Sites such as Forbes have "optimized the mobile experience" with clean ads at the top or bottom of the screen, with content in middle.

has the early lead in the U.S. in monetizing mobile, with 51 percent of the market, largely due to its success with mobile search ads, said Noah Elkin, an eMarketer analyst. Phone numbers embedded in mobile ads on Google's click-to-call feature, for example, generate about 15 million calls per month.

Facebook barely registers yet, though the company has the potential to rake in $2.54 billion from mobile advertising, according to Chitika. Facebook Sponsored Stories - an ad that appears on a member's page, and generally consists of a friend's name, profile picture and an advertiser the person "likes" - now appears in a user's mobile news feed.

Explore further: Amazon launches 3D printing store

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Drift to mobile a new challenge for Facebook

May 18, 2012

With Internet users increasingly going mobile, a major challenge for Facebook will be trying to make money from its massive global presence in a more complex mobile space.

Facebook to pass Yahoo! in display ad revenue

Jun 20, 2011

Facebook is on track to pass Yahoo! in US display advertising revenue this year while Google will also gain market share, according to a forecast published on Monday by digital marketing firm eMarketer.

Facebook top publisher of display ads: comScore

May 13, 2010

Facebook has passed Yahoo! to become the top US publisher of display ads on the Web, another milestone for the fast-growing social network, according to figures released on Thursday.

Facebook gets big slice of online display ad pie

May 04, 2011

Facebook served up nearly a third of the 1.11 trillion display ads delivered to US Internet users in the first three months of this year, industry tracker comScore said on Wednesday.

Recommended for you

Chinese smartphone makers win as market swells

1 hour ago

Chinese smartphone makers racked up big gains as the global market for Internet-linked handsets grew to record levels in the second quarter, International Data Corp said Tuesday.

Full appeals court upholds labels on meat packages

1 hour ago

(AP)—A federal appeals court has upheld new government rules that require labels on packaged steaks, ribs and other cuts of meat to say where the animals were born, raised and slaughtered.

BlackBerry to buy Germany's Secusmart

1 hour ago

(AP)—German voice and data encryption specialist Secusmart, which helps equip the German government with secure smartphones, says it's being acquired by BlackBerry for an undisclosed sum.

India's Flipkart raises $1 bn to tackle Amazon

3 hours ago

India's top e-commerce company Flipkart said Tuesday it had raised $1 billion (60 billion rupees) in funds as it battles US giant Amazon for supremacy in the hyper-competitive local market.

User comments : 0