Bloomberg News

Google, Millennial Media Take Ad Share Away From Apple, IDC Says

December 12, 2011

Dec. 12 (Bloomberg) -- Google Inc. and Millennial Media Inc. are gaining U.S. market share in mobile display ads this year, at Apple Inc.’s expense, according to an analysis by consultant IDC.

Google’s share of the market for 2011 will rise to 24 percent share, from 19 percent in 2010, said IDC, a unit of Boston-based International Data Group. Millennial’s share will climb to 17 percent from 15 percent, as Apple’s declines to 15 percent from 19 percent, IDC said today.

The three companies are the largest pursuing the U.S. mobile advertising market, which will more than double to $2.1 billion this year, from $877 million in 2010, IDC said. Google has solidified its market lead, and Millennial has assumed the No. 2 position in mobile ads.

“This is primarily a story about Apple’s weakness,” Karsten Weide, a program vice president at IDC, said in an interview. Many advertisers opted for competitors’ ad networks, so they can reach both Apple and non-Apple devices, he said.

An Apple spokesman, Tom Neumayr, declined to comment, while a Millennial Media spokeswoman, Mack McKelvey, had no comment on a report she hasn’t seen. A Google spokesman, Aaron Stein, said the company won’t comment on third-party research.

Mobile display ad revenues for 2011 will total $630 million, while mobile search ads contribute the larger chunk of the mobile advertising market, $1.5 billion, IDC said. Search ads appear alongside search results, while display ads appear as banners or short video clips on Web pages.

Google Benefits

Google has been the largest beneficiary as consumers use smartphones and tablets to access the Internet and view mobile ads. The company dominates mobile search, with a 91 percent share. Its combined market share for mobile display and search ads will rise to 71 percent, up 11 points from last year, IDC said.

In 2012, IDC said it expects the U.S. mobile advertising market to almost double, to $4.1 billion largely tied to Internet searches.

“Advertisers have decided that the mobile device is best suited to search,” Weide said. As for display ads on the smaller screens on mobile devices, “the impact on the consumer is considered to be worse than on desktop.”

--Editors: Jeffrey Tannenbaum, Niamh Ring To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net


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