Jennifer Booton of MarketWatch reported that when it comes to mobile advertising Facebook is unrivaled according to Morgan Stanley analyst Ben Swinburne. Google and Facebook are duking it out in the mobile advertising space and mobile has been an area that has been challenging for Google.
Morgan Stanley analyst Ben Swinburne predicted Monday, after initiating coverage of Facebook at overweight. This comes as Facebook continues to nab a larger share of the global display market, with impressions on mobile surpassing those on desktop earlier this year. Morgan Stanley forecasts Facebook’s share of global mobile display spend growing by another 30% over the next four years. The social network commands 20% of U.S. mobile time spent currently, with mobile monthly active users growing 29% last quarter to 1.12 billion. Mobile advertising revenue jumped 49% last quarter, representing roughly 66% of total ad revenue. Swinburne said Facebook now represents an “unrivaled” level of scale, targeting and engagement for advertisers. This, along with increased spending expected to boost R&D, will help improve earnings per share by 30% from 2015 through 2018, he said.
Back in June, Conner Forrest wrote on Tech Republic about the emergence of Facebook advertising, it is in fact mobile which is leading the way for Facebook and allowing them to close ground on Google.
Google is the undisputed titan of online advertising, owning roughly 32% of digital advertising market share and generates more ad revenue than any other company. However, Facebook has emerged as a growing threat to Google, especially because of mobile.
Recently, Facebook announced a renewed focus on small and medium business at the kickoff event for its “Facebook Fit” tour in New York City. Facebook also announced new marketing tools at the event, such as the Lookalike Audiences that give companies the ability to upload customer information and have Facebook find people that match those data points.
Ad Week took a look at Google’s mobile problem back in April after dissecting Q1 earnings.
Google topped $15 billion in first quarter revenue but still reported lower costs per click while the industry shifts to less expensive mobile ads. Google’s quarterly results also fell short of Wall Street estimates, sending the newly split stock down about 2.6 percent to $542 a share in after-hours trading.
“Google’s got a mobile problem just like a lot of companies,” said Colin Gillis, senior technology analyst with BGC Partners.
Google told analysts on its earnings call that it expects mobile pricing will eventually surpass desktop. The search giant is working to prove that mobile clicks are more valuable.
Marketing Land came back with an article in June that said maybe Google did not have a mobile problem.
There have been a lot of assumptions that Google’s mobile ad business is cause for concern. After its latest earnings report showed the price advertisers pay per ad click fell for the eleventh straight quarter, fears again arose that the search giant isn’t keeping pace with the consumer shift to smartphones. So is Google’s mobile advertising business in trouble? The truth is nobody really knows. In fact, it might be doing great.
We do know that Google reported record revenues and growth in advertising click volume in the second quarter. But the cost-per-click (CPC) number that fuels the discussion about Google’s supposed mobile troubles is comprised of too many parts to provide any real insights into that (or any) aspect of the business.