It has only been half a year and total US online ad revenues have reached the twenty billion dollar mark. That is great news! It shows an improvement in the online economy and it shows greater confidence on the part of brick and mortar businesses in using online ads to reach their target markets. Keep in mind that this is twenty billion dollars and the year isn’t even over yet. That’s for the half way mark. We might be looking at a forty billion dollar year or more. That’s huge money and companies like Google, Yahoo and other massive internet giants that are reliant on ad revenues should be happy about this report.
Interestingly enough, this sales figure indicates a very interesting trend. The fastest growing slice of this twenty billion pie is mobile. Search revenues only increased seven percent. All told, this shows that the biggest action is in mobile ad technology. This should be a wake up call to venture capital firms and startup companies to aim towards mobile advertising space in terms of monetization and revenue growth. The downside to migrating to a mobile strategy is the fact that historically, at least since the iPhone has been around, mobile ads tend to generate cheaper placements. In other words, while there tends to be a lot of people placing orders for mobile ads, the actual value of the order tend to be lower than traditional desktop ads.
Will this persist? Will this be the trend for the long term future? Nobody knows. It all depends on how powerful and how quickly social network sites and search engine companies can convert mobile searchers and ad viewers into actual buyers. There’s still a big divide between buying on your mobile phone and buying while you’re on your desktop. Buying while on your desktop or laptop has become second nature to most consumers. People don’t think twice about engaging in eCommerce while they’re on these types of devices. They are however more hesitant to whip out their credit cards when they are dealing with their phone or tablet. Time will only tell if that barrier will fall. If that does change then we will definitely see mobile ad rates reaching the same levels as desktop and portable computing ads.