Blog Post

Search beats display by large margin in mobile ad spending, study shows

Facebook (s FB) better hurry up with that search engine it’s reportedly building. A new survey of the mobile market shows that search ads are outstripping display ads by a wide margin in every region of the world.

According to a report from the Interactive Advertising Bureau, mobile ad buyers in Europe and Asia are spending almost three times more on search: a combined $2,284 million versus $858 million. In North America, the discrepancy is smaller but still tilted heavily in favor of search over display: $811 million versus $572 million. Ads related to mobile messaging make up a much smaller category.

The new figures could further muddy companies’ efforts to solve the mobile ad problem that helped sandbag Facebook’s big IPO last month. Even though ad pundits have predicted that 2012 (and before that 2011) is the year mobile advertising takes off, the heralded boom has yet to arrive.

The problems include smaller screens that are less friendly to display ads and a sense that mobile ads are inherently intrusive. Still, the advertising industry remains tantalized by the promise of a mobile ad breakthrough that will let it deliver personalized messages to consumers wherever they go.

Research firm eMarketer predicts U.S. mobile advertising will grow five fold to $10 billion by 2016 and the spending split between search and display will be about equal.

In the meantime, Facebook is redoubling its mobile ad strategy by offering marketers a chance to buy “sponsored stories” within users’ mobile feeds. At the same time, Forbes reports that Google (s goog) is attempting to consolidate various pieces of the fragmented industry so as to give advertisers a chance to serve and track the same ad across a variety of platforms.

(Clarification – A Facebook spokesperson provided the following statement: “Marketers were able to buy sponsored stories on mobile as part of a bundle since fMC earlier this year. [The] announcement just makes it possible for them to buy sponsored stories on mobile separately from other placements.”)

Here’s a shot of the ad breakdown from today’s report:

4 Responses to “Search beats display by large margin in mobile ad spending, study shows”

  1. ricdesan

    I find this to be a no brainer as display is dieing a gruesome death on the Internet in general and will be almost a non- sequiter on mobile as anything conventional on a small screen will automatically be intrusive and serve as negative branding for any marketers that use it.

  2. Kostas Papahatzis

    I strongly believe that Facebook advertising is going through growing pains.
    Actually placing Google and Facebook timelines side by side, the former could barely make a living in the first 10 years, until Adwords and Adsense came into existence.

    Facebook made money much faster, no matter whether their ads are ground breaking or not. In the mobile space search ads obviously blend better than display ads; no doubt there is a team somewhere in Facebook brainstorming in trying to come out with something better. I think they have grown in a shorter time space than big G, and they will also roll out other stuff at a much faster pace. Or else.

    • Tim Norris

      PS. You’ll want to view that linked ad on a mobile device or in Chrome for best results, or Firefox if you have MP4 support.