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American Mobile Advertising will Reach $7B in 2013

A new group of publishers are rapidly taking over the mobile display advertising market in the United States. Where in past years, advertising networks -- such as Google, Millennial Media, and Apple -- received most of the spending on mobile display ads, now individual publishers control the segment.

Facebook, Pandora, Twitter, and The Weather Channel all registered strong sales in 2012 -- most of them started from zero sales in 2011.

Publishers controlled 52 percent of U.S. mobile display ad spending in 2012 -- that's compared to the 39 percent they received in 2011, according to the latest market study by International Data Corporation (IDC).

"Mobile ad networks are losing market share to publishers, and we expect them to lose even more going forward," said Karsten Weide, Vice President of Media & Entertainment at IDC.

Networks, especially independent ones, are entering a difficult phase, in which, with an ever smaller share of revenue, they'll have to compete with publishers, which will only grow in strength.

Additional findings from the IDC study include:
  • Strong growth in mobile advertising spending in the United States continues, even if annual growth rates continue to decline: the market grew by 88 percent in 2012 (down from 125 percent in 2011) to a total of $4.5 billion (up from $2.4 billion in 2011).
  • Mobile market share within all digital advertising reached 11 percent in 2012, up from 7 percent in 2011. For 2013, IDC expects a growth rate of 55–65 percent, with spending coming in around $7 billion, for the United States.
  • Mobile display advertising has increased its market share of total mobile spending by no less than 8 percentage points to 39 percent, versus 61 percent for search ads, in 2012. Mobile display ads attracted $1.7 billion in 2012 compared with $0.7 billion in 2011. Growth rates have picked up again in 2012 after a dip in 2011. They were at 134 percent in 2010, 118 percent in 2011, and 132 percent in 2012.
  • Among mobile publishers selling display advertising, Facebook was the number 1 company in 2012 ($234 million gross revenue), followed by Pandora ($229 million) with Twitter coming in third ($117 million). In the ad network segment, not much has changed. Google still holds the top spot ($243 million). One change is that Millennial Media ($151 million) has taken over Apple ($125 million) to claim the number 2 spot. Jumptap remains number 4 ($90 million).
  • Marketers spent $2.8 billion in 2012 on mobile search ads, compared with $1.6 billion in 2011 and $0.7 billion in 2010. Growth rates have slowed significantly, down from 195 percent in 2010 to 127 percent in 2011 to 68 percent in 2012. Google still dominates the market with gross revenue of $2,166 million, and a gross market share of 79 percent.

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