Google, Facebook drive mobile ad market growth: Report

Google Inc's mobile ad revenue in the United States will be roughly USD 4 billion next year, while Facebook Inc's nascent mobile advertising business will more than double, according to a new study by research firm eMarketer.

Marketers are boosting spending on ads that reach consumers on smartphones and tablet PCs at a much faster than expected pace, eMarketer said on Monday. The firm said it expects that overall US mobile ad spending in 2012 will increase 180 percent year-on-year to more than USD 4 billion- a sharp revision from its forecast in September which sized the market at USD 2.61 billion.

Internet search engine Google is expected to remain the top player in the market for the foreseeable future, with revenue reaching USD 6.33 billion in 2014, eMarketer projected. Google's mobile ad revenue, will increase roughly 84 percent in 2013 to reach USD 3.98 billion.

Facebook mobile ads in the United States will total USD 339.3 million in 2012 and rise to USD 851.4 million in 2013, eMarekter said. The firm's figures are based on an analysis of data from research firms, investment banks and "other sources" on ad revenues, ad impressions and ad prices.

While Facebook offered no mobile ads on its social network at the beginning of the year - a factor that has pressured its revenue growth and its stock price - the company's mobile ad business grew at an "unexpected" rate in the third quarter, eMarketer said.

Online music streaming service Pandora Media Inc , microblog Twitter and iPhone-maker Apple Inc round out the top five US mobile ad business by revenue, according to eMarketer.

Mobile ad revenue at the privately-held Twitter, which does not disclose its financial results, will reach USD 134.9 million in 2012 and grow to USD 248.9 million next year, eMarketer said.

Consumers are increasingly using smartphones instead of, or in addition, to PCs to surf the Web and to use online applications such as video games and music streaming services. More than half of Facebook's 1 billion users accessed the social network on a mobile device in September, the company said in its most recent 10Q filing.

Mobile advertising remains a small portion of the total US advertising market, accounting for 2.4 percent of all spending in 2012 compared to 38.9 percent for television, eMarketer said. But mobile ad spending will overtake ad spending on radio and newspapers in 2016, the firm estimated.