"This isn't growth obviously in usership, because we knew consumers were accessing these platforms on mobile. It's the turnaround in getting the advertisers to follow the users and get them more comfortable advertising on mobile platforms and through mobile media," says Altimeter Group analyst Rebecca Lieb.
History Repeats Itself on Social Ads
"What I do see happening is something that we saw happening 15 to 20 years ago at the dawn of digital, which is that all of these users were rushing towards the Internet and advertisers were very tardy in following them. Even though we knew it was where people were it wasn't where advertisers' skill sets were, comfort zone, understanding best practices, all of that stuff that has to grow up around new platforms," Lieb says.
"I'm fond of saying that just because television was invented one day, it doesn't mean the 30-minute sitcom came along a week later. I think we're seeing that happen with mobile -- it's there, the users are on it, what do we as advertisers and as marketers do with it?" Lieb says.
Direct marketers are leading the charge in social advertising just as they did in the early days of online. "But in order to really monetize platforms, you need brand advertisers. That's where the money is you know, the CPGs (consumer packaged goods) and the automotives of the world," says Lieb.
"People tend to go on Facebook and mobile platforms the way that people use mobile a lot, which is kind of as a time-waster. You use mobile when you're in line, when you're commuting, when you're waiting for something. It's not what we all use when we're sitting at our desks doing our jobs," she says. "So it's about not being interruptive, it's about being informative and interesting. It's really a dimension of content marketing, which is the marketing of attraction much more so than it is the marketing of interruption."
Shifting dollars from online or traditional advertising to mobile has taken longer than most expected, says Albright. But the money is flowing now and it will continue to grow as the makeup of advertisers gets more diverse, he says.
Although it's taken Facebook longer than Twitter to earn the majority of its revenue from mobile ads, the company is leading the market by a commanding margin. Facebook's total advertising revenue increased 67 percent year-over-year to $2.68 billion in the last quarter. Mobile advertising comprised 62 percent of that stream.
Meanwhile, Twitter generated 81 percent of its $277 million in advertising revenue from mobile ads in the last quarter. Its advertising revenue jumped 129 percent from the year ago period while ad revenue per thousand timeline views doubled over the same period to $1.60.
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