U.S. mobile ad dollars shift to search apps
By 2018, eMarketer estimates, mobile search spending will reach $28.41 billion, or 85.9% of the US digital search advertising market.
eMarketer's definition of mobile search advertising includes paid ads served by search engines, search applications and carrier portals to all mobile devices, including smartphones and tablets.
As smartphone and tablet usage continue to increase, users are becoming more sophisticated, blurring their mental division between browsers and apps. Mobile marketers are responding to the fact that mobile search behavior is becoming less comparable with its desktop/laptop counterpart, and as a result, the market for mobile search advertising continues to fragment.
Google's declining share of mobile search dollars is notable in context with the market's fragmentation. Google owned 82.8% of the $2.24 billion mobile search market in 2012, and while the company's mobile search revenues continue to increase, other
Google still dominates browser-based searches on mobile devices, but niche search apps are also becoming much more prevalent. This caused Google's share to drop to 68.5% in 2013, according to eMarketer estimates, while the long tail of "other" companies increased share from 5.4% to 22.9%. This year, eMarketer expects Google's share to fall again, to 65.7%, while the "other" category reaches 27.3%.
This category includes search stalwarts like Yahoo and Bing, which eMarketer estimates have material mobile search revenues, but they have not been broken out yet in company earnings statements to provide a basis for reference. "Other" also includes niche service providers such as travel metasearch apps like KAYAK, job search apps like Indeed, ecommerce sales apps like Amazon and contextual search apps like Shazam, all of which charge advertisers for search listings and are beginning to see gains in their mobile advertising revenues.
Yelp is one of the companies beginning to emerge from the pack, however, and this forecast includes eMarketer's first-ever projections of the company's ad revenues. eMarketer estimates that Yelp's mobile search revenues will grow 136.0% to reach $119.4 million this year, accounting for just over 40% the company's overall search intake.
Still representing a small share of the mobile search advertising market, at 1.3% this year, eMarketer expects Yelp's mobile search ad revenues to nearly triple by 2016, accounting for close to two-thirds of the company's total search revenues, as well as for about 2% of the overall mobile search ad market. ■