Is the Mobile Revenue Gap Closing?
Making money from mobile is hard. Despite the fact users are ditching their laptops and desktops in droves in favor of smartphones and tablets, publishers and platforms have struggled to succeed financially. But that might finally be starting to change.
According to social ad-buying software provider Kenshoo, mobile now accounts for over 20 percent of Facebook ad revenues, for example. The firm analyzed its clients’ spending habits over the last two months of last year and found advertiser demand for Facebook’s mobile inventory is growing, and that mobile ads on the site also carry a 70 percent premium over desktop ones.
Twitter, meanwhile, says it’s making progress as well. The company generated more from mobile users versus desktop users during multiple days in 2012, according to global revenue officer Adam Bain.
Companies like BuzzFeed and Pandora say they, too, are slowly seeing mobile revenues increase as the channel slowly matures. But BuzzFeed credits that to its focus on sponsored content, or what it calls “native” ad units. As with Twitter and Facebook, those formats perhaps translate more easily to the mobile environment than formats such as display which, to date, have shown little evidence of long-term success.
Despite the progress, the fact remains that a clear revenue gap continues to exist for the vast majority of publishers. For companies like Facebook and Twitter, it might be closing, but it still presents a significant challenge, and its size remains unclear. Facebook likes to talk about how many of its users access its service through mobile devices but gives little real indication about what portion of use occurs on them overall. It’s a similar story for Twitter and BuzzFeed, too.
As a result, 2013 could be an interesting year for mobile monetization as a whole. Mobile was easier to stomach when it represented just 10 or 15 percent of a publisher’s traffic, but many are now seeing upwards of 30 or 40 percent of their eyeballs coming from non-desktop devices. Without 30 or 40 percent of revenues coming from those channels, too, things can start to get very expensive very quickly, especially if, like Pandora, you’re paying fixed fees for things like licensing.
2012 saw many mobile publishers and services starting to get serious about monetization, but 2013 could be a sink-or-swim year for some. Though the mobile revenue gap appears to be closing, the question remains: Is it closing fast enough?
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