December 18, 2012:US mobile ad spending growing faster than expected says eMarketer

We’ve been writing about mobile advertising forecasts for several years at Music Ally, seeing them as relevant to the music industry’s mobile ambitions – even if the emphasis in the last couple of years has been more on mobile as a driver for premium subscriptions to services like Spotify, Deezer and Rhapsody.

Comments at our 2013: A Survival Guide event last week by UMG’s Francis Keeling showed that mobile ads are still very much on that company’s radar as a business model to support music, however.

With that in mind, eMarketer’s latest mobile advertising forecasts are worth a read, even if they’re focused on one country: the US. The analyst claims “US mobile ad spending is growing more quickly than previously expected,” and predicts a 180% rise in spending in 2012 to just over $4bn.

That’s a big revision upwards from the company’s previous estimate, made in September, of $2.6bn of US mobile ad revenues for the year. Which, yes, reminds us that these forecasts tend to be a bit finger-stick-in-windy.

Is music benefitting from this growth? Partly. eMarketer pegs Pandora as the third largest company in terms of US mobile ad revenues for 2012, pulling in $224.8m for the year for a 5.9% share of spending there. eMarketer thinks this will rise to $495.6m of mobile advertising revenues for Pandora in 2014, too.

First place goes to Google – who else? – with $2.2bn of estimated US mobile ad revenues in 2012 for a 56.6% market share. Facebook takes second place with $339.3m / 8.8%, and Twitter fourth with $134.9m / 3.5%. Both social networks launched their first mobile ads this year.

And that’s the thing for 2013 and beyond: how might the music industry tap into Google and Facebook’s mobile advertising networks in particular?

An ad-supported Google Music service remains an intriguing possibility, while Facebook’s reported plans to launch mobile ads outside its own app could be a big opportunity for any Open Graph-connected streaming music service to experiment with a free mobile tier – radio, if not full on-demand.

Interesting times, to say the least.


Stuart Dredge
READ MORE: Analysis News
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