By now, most companies have reported their 2014 earnings, and so now begins the process of comparing and analyzing them. It’s not really much of a surprise that two of the largest companies there are, Facebook and Google, get the most mobile ad revenues — together, 50% of the total.
In 2011, Facebook didn’t earn a single dollar from mobile ad revenue; yet in 2014, the social media giant drew in over $7 billion. Many people perceived this huge increase to mean that Facebook does better than Google in that regard, but that simply isn’t the case.
Steven Max Patterson writes for Network World that mobile ads on Facebook and Google couldn’t be more different — he describes them as “apples and oranges.”
One the one hand, Facebook leads ad sales in its newsfeed, which is super accurate because of the wealth of user data that Facebook has access to. On the other, Google excels with mobile search. Again — apples to oranges here.
Where the two do intersect in the mobile ad world, according to Patterson, is competing for the best return on investment (ROI). Conversion rates are hard to track on mobile, however, since the ad types vary. But aye, there’s the rub — since conversions are hard to see through mobile ads, prices are probably going to stay low.
Forbes contributor Robert Hof says that that’s the big problem with Facebook’s success with mobile ads — the prices just aren’t going to compare to those spent on browser ads.
Hof adds that people just don’t respond to calls to action on mobile — like making purchases, downloading white papers, or filling out forms — as much as they do on their desktop computers. Though mobile ad revenue is seeing healthy growth right now, it won’t for long. At least until mobile interfaces change enough for those ads to amount to conversions.
In fact, experts say that alhough local mobile ad spending is expected to see substantial growth — from $800 million to $18 billion by next year, it could stagnate after that.
Regardless of whether or not we’re comparing apples to apples or oranges, and regardless of the fly in the mobile ad revenue ointment, there’s no disputing that both Facebook and Google are getting a pretty big chunk of the pie — at least for now.