Google, Facebook Losing Ground On Mobile Ads?

In a recent report CNBC declared 2014 to be the year of the mobile consumer. While that general declaration may do little more than peak interest in their news story, it is a title may be fitting considering how prevalent smart phone usage has become. Just how many consumers are in a position to be reached by ads on their phones? A pew research study revealed that 61% of American men and 57% of women have smartphones. However, when broken down by age group, cell phone usage truly takes shape. Just 49% of adults age 50-64 have a smartphone, compared with 74% of those aged 30-49, while 83% of adults 18-29 have potentially ad-ready smart phones.

Mobile advertising is constantly evolving. The two industry giants, Google and Facebook have a firm grasp on the mobile advertising market; however, their market share is actually shrinking. A report by Bloomberg revealed that while Google and Facebook currently have 55% of mobile ad spending going to their ad platforms, that number would drop to 48% by 2016. Who are those two goliath tech companies losing ad spending to? In this case, that spend is being taken by much smaller mobile ad start-ups. Brian Yamada, Executive Director of Digital Ad agency VML explained, “Google and Facebook are definitely the two big dogs, but there’s a lot of little ones barking in interesting ways.” One of the ways in which Google could lose out to the smaller advertising firms is the migration to mobile. The California-based company holds 37% of the mobile ad market, however there are concerns. As consumers make use more often of apps on their phone instead of using a browser, they are not seeing Google’s browser-based ads. Mike Boland of BIA Kelsey noted, “The browser is no longer the predominant front door. As the world transfers over to mobile, Google is in a really challenged position.” As Google is wondering about the future, and Facebook sits at number two, Yahoo is reportedly primed to pass Twitter as the company generating the 3rd highest mobile ad spending in the U.S.

What could this mean for dealers? Google is the king of browser and mobile ads, however, what does the future hold? If more start-ups are able to provide access to consumers though app-based ads, would you direct more spending to their product?