Advertising Insights: Mobile Ad Spend Growth, In-App Ad Revenue, and Facebook Domination

By Hilary Givens

Advertising has changed dramatically throughout its history. A multitude of media types have come and gone, some longer than others. Today, we notice the rise of mobile and the increase in advertising efforts in that particular space. The increase of mobile app usage has grown, some apps gaining more user time than others. This week, we’d like to take you through these trends and explain a little bit about what’s going on.

We’ve experienced many different media types take hold from cable and broadcast television, to the Internet, and now mobile advertising. IAB showed that through comparing media type growth rates within their first 5 years of adoption, we see that mobile advertising spend has reached an impressive ad spend level (in billions) by its fifth year, of all media types in the US. In its first five years, mobile ad spend had a total compound annual growth rate (CAGR) of 110%, reaching the highest total ad spend by its fifth year, across all media types.

If you’re in advertising, the growth of mobile is likely something you’re aware of already. So why are we highlighting this data again and what makes it especially interesting to us? The answer to that question is where the mobile ad spend growth is coming from and why. Thanks to Flurry, we know that 86% of time spent on mobile is spent in mobile apps. Given that data, it’s no wonder advertisers have responded by pouring money in-app advertising, leading to 61% of ad spend on mobile is in-app inventory in the UK, according to IAB.What has caused mobile applications to gain so much attention? Continue reading to find out.

It’s no surprise we attribute this growth largely to Facebook, the world’s single biggest app in mobile adoption. The graphic below shows data from last week’s Facebook earnings announcement regarding the growth in Facebook’s ad revenue as a percentage of its total ad revenue. In the last three years, Facebook has gone from zero percent of its ad revenue being from mobile ads to 73% of its ad revenue. That’s incredible. No wonder so many advertisers have turned to Facebook to increase their brand awareness, launch campaigns, and find new customers for the future.

For more information about how to succeed in mobile advertising with Facebook, download our case study with SGN.