I recently wrote to this blog my opinion on the current market valuations of the “leaders” in the online advertising market. In summary, I think each of these businesses is over valued. So why would I care about just who is the leader in the mobile advertising market?
I am not a full time investor. I also offer marketing consulting services. Mobile advertising is a genuine promotional opportunity for my clients. So, from this perspective I retain a high degree of interest in the companies leading mobile advertising.
At present I think facebook is the leader in this market, while Google is playing some catch up. In a transcript of facebook’s Q1 2014 earnings report, Mark Zuckerberg prefaces facebook’s results with a strong statement, specifically on mobile: “We also reached new milestones as a mobile company, with more than one billion monthly actives on mobile and almost 55% of our daily actives only connecting on mobile.” (note: this quote is from the transcript as posted to the Seeking Alpha web site, not from the actual webcast)
So, if these monthly actives are compiled from the daily actives, then facebook is reaching 550 million monthly actives on mobile, only.
It’s difficult to directly compare these results to Google. I couldn’t find this level of granularity on “actives” in Google’s latest quarterly report. But Mr. Zuckerberg’s claim, “And mobile accounted for 59% of our advertising revenue [which, in turn, Mr. Zuckerberg claims grew 82% year-over-year]” (ibid) is much stronger than Nikesh Arora’s comments on mobile advertising for Google. In Google’s latest quarterly earnings report, Mr. Arora noted pricing resistance for Google’s customers considering mobile CPC advertising spends with Google.
facebook’s recent acquisition of WhatsApp promises to keep the momentum going. WhatsApp is a messaging application, complementing facebook’s own Messenger. Both of these applications are high use across mobile consumers.
Finally, facebook’s investment in Internet.org also looks like a strong driver for further momentum as the company continues to mine mobile consumers for more revenue. Mr. Zuckerberg explains: “[b]y partnering with mobile operators in the Philippines and Paraguay, [facebook] doubled the number of people using mobile data with our partners and brought almost three million more people onto the Internet.” (ibid)
Based on these points, together with facebook’s smart phone app and branded smart phone efforts, I’m comfortable calling facebook today’s leader in the online mobile advertising market.
Disclaimer: I have no position, at present, in facebook or Google
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