"Winner Take All" in Mobile Ad Markets

For observers long accustomed to the relative fragmentation of advertising revenues and market share across television, radio, newspapers, and magazines, the extreme concentration of mobile advertising revenue is shocking.

Facebook and Google accounted for about 67 percent of all global mobile ad market revenue in 2013, and it is projected that Facebook and Google will earn nearly 69 percent of all global mobile ad revenue in 2014.

Between them, Google and Facebook earned 75 percent of the $9.2 billion in incremental global mobile ad revenues in 2013 ($6.92 billion), according to eMarketer .

As recently as 2012, Facebook accounted for just 5.4 percent of the global mobile advertising market.

In 2013, that share increased to 17.5 percent, and eMarketer predicts Facebook’s mobile ad share will rise in 2014 to 21.7 percent.

Google by itself earned about  50 percent of global mobile ad revenue in 2013.

In 2012, only 11 percent of Facebook’s net ad revenues worldwide came from mobile, exploding to 45 percent in 2013.

In 2014, eMarketer estimates that mobile will account for 63 percent of Facebook’s net digital ad revenues.

Mobile accounted for 23 percent of Google’s net ad revenues worldwide in 2013, and eMarketer estimates this share will increase to nearly 34 percent in 2014.

In 2013, global mobile ad spending increased 105 percent to $17.96 billion. In 2014, mobile is on pace to rise another 75 percent to $31.45 billion, accounting for nearly 25 percent of total digital ad spending worldwide.

Some might call that a “winner take all” market, something observers say increasingly is true for Internet businesses, as arguably is true for all industries with high fixed cost and low marginal cost.

If that sounds familiar, it is because that is the structure of the global telecom business as well. “Winner take all” might be expressed as the “rule of three,” describing the typical national telecom market which is dominated by no more than three providers.