July 9-10, 2013
San Francisco, CA

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By itself, Google accounts for 56 percent of all global mobile ad revenues. Social giant Facebook takes a much smaller chunk with 13 percent. But together, they own the lion’s share of mobile ad dollars.

Advertisers spent $8.8 billion hawking their wares via mobile ads last year, according to new numbers from eMarketer.

Of that, Google raked in $4.61 billion — triple what it made in 2011. And eMarketer estimates that Google will almost double mobile revenues in 2013 to a staggering $8.85 billion. While Facebook’s numbers are much smaller, the company is also much younger and much newer to the mobile ad marketplace. As of just two years ago, Facebook had no mobile ad revenue at all.

Zilch. Nada.

Now Facebook is projected to bring in just over $2 billion in mobile ads, up a massive 333 percent from the $470 million it earned in 2012. In comparison, fellow monetization newcomer Twitter brought in $140 million in 2012 and is projected to double that to $310 million in 2013.

Whichever way you slice, the mobile ad pie is growing fast, and relatively new companies — even Google is just 15-years-old — are taking bigger and bigger swaths.

In terms of total digital ad spend, Google is also the unquestioned leader.

One out of every three dollars spent on digital ads is spent with Google. The search-plus-mobile-plus-designer-eyewear-plus-advertising giant (plus a little bit of everything else) took home $32.73 billion in digital ad revenues in 2012. That’s in a market with a total size of $104 billion.

In 2013, eMarketer estimates that Google will grow dollars and share to $39 billion and 33 percent.

Facebook will also grow by about 20 percent from about $4.3 billion in total digital ad revenue in 2012 to almost $6 billion, taking in 5 percent of the overall digital pie. Yahoo, Microsoft, Barry Dillers InterActiveCorp, AOL, Amazon, Pandora, Twitter, and LinkedIn will fill out the top 10.

Interestingly, however, when you look at the fastest growers, the leader board reverses.

Twitter, which was the fastest-growing in 2012, will also grow the most in 2013, eMarketer says, by just over 100 percent each year. Internet radio leader Pandora and professional networking giant LinkedIn will both grow at or about 50 percent while Google will only grow by 18.6 percent.

Naturally, that’s due to the law of large numbers: It’s hard to keep doubling when you get to revenues that start with a capital B.

But it’s also a sign that the young companies are strong and growing.

Image credit: John Koetsier

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

While Apple remains a constant threat for Google in mobile, the Android maker is also worried about its most successful hardware partner: Samsung.

Google executives now fear that Samsung could use its massive clout to demand a bigger share of mobile ad revenue from search, the Wall Street Journal reports. Google offers Android free to manufacturers, but it shares search ad revenues with carriers and handset partners.

So far, Samsung has received around 10 percent of search revenue, a person familiar with Google’s deals told the WSJ. But it’s not hard to imagine that the company, which now holds 40 percent of the Android smartphone market, could demand a bigger share. As Samsung’s phone sales increase — it accounted for 39.6 percent of all smartphones shipped in 2012 (almost all of them Android phones), while Apple accounted for 25.1 percent, according to IDC — a bigger revenue share for Samsung could cost Google quite a bit.

Samsung also has its own mobile operating system, Tizen, for low-end mobile devices. And it builds Windows Phone smartphones. That gives Samsung much more flexibility than Apple, and it’s yet another worry for Google. (Just imagine if Samsung replicated the Galaxy S line’s success on Windows Phone.)

Google’s relationship with Samsung will likely remain complicated for some time. As Samsung sells more devices, Google also pulls in more mobile search revenue. Samsung also has a complex relationship with Apple, since it makes the chips that power the iPhone and iPad, while also competing directly with Apple with its smartphones and tablets.

Andy Rubin, the head of Android at Google, told a group of the company’s executives at a retreat last year that the Motorola Mobility acquisition serves as an insurance policy against any one Android partner getting too big, a source told the WSJ. Google paid $12.5 billion for Motorola Mobility in 2011, but at the time it said Android would stay open and it wouldn’t play favorites with Motorola’s hardware.

But recent rumors point to Motorola developing a mysterious “X Phone,” which will likely be Google’s Android response to the iPhone. It’ll be different from Google’s Nexus line of smartphones and tablets since it will be built entirely by Google (via Motorola). Google works with hardware partners for its Nexus line, for example the Nexus 4 is built by LG and the Nexus 7 by Asus.

Google still hasn’t confirmed that the X Phone exists, but it’s becoming increasingly clear that the company needs its own phone not just to fight Apple, but also to keep Samsung from ruling the entire Android ecosystem.

Photo: Nan Palmero/Flickr

Google jumped into Facebook’s territory when it launched its Google+ social network last year. Now Facebook seems to be jumping in to compete with Google in the advertising space. External ads from the social network are appearing on Zynga.com — the first of their kind outside of Facebook’s own domain.

“People may now see ads and sponsored stories from Facebook on Zynga.com,” said Facebook in a statement to VentureBeat. “We don’t share any information about people or advertisers with Zynga and advertisers do not have any new targeting criteria.”

The advertising appears once you’ve logged into Zynga.com with your Facebook account. It is otherwise unavailable. The ad I found appeared in the lower right hand corner, under my list of friends online and showed my friends who “liked” that brand and had a “sponsored”  tag with the Facebook ‘F’ next to it. Zynga and Facebook have an advertising revenue share set up.

Facebook did disclose an agreement between the two companies after Zynga filed an amendment to its S-1 filing in 2011. It told Inside Facebook that it had promised to help Zynga with external advertising in the future. At that time, the social network didn’t reveal timing for the new advertising. The appearance of Facebook ads on Zynga.com does, however, make it seem possible that a home-grown Facebook ad network is on its way, even if it’s not immediately obvious how it will work.

Advertising is Facebook’s lifeblood and the ability to expand beyond walls and news feeds is a huge opportunity to take revenue away from Google. Google runs its own ad programs, such as AdSense and AdWords specifically for advertising on its search engine. Rumors also say that Facebook may decide to compete with Google in search too.

An image posted by Mark Zuckerberg (see right) soon after the company announced its intentions to go public stirred these theories. The picture showed Zuck’s laptop with Facebook pulled up. At the top of the screen was a long, thin, white bar that greatly resembled a revamped search field. Altimeter Group analyst Rebecca Leib told VentureBeat at the time that she thought a Facebook search product could “have not only very tangible advertising benefits for Facebook, but also make Facebook a more compelling place for users.”

While no such search has yet been revealed, it’s safe to assume that Facebook will be competing with Google more deeply in the near future.

hat tip Inside Facebook

We’ve heard so much about the Mac Flashback Trojan in the last month, but what is its goal? Turns out it’s financial gain (who knew) in the form of ad revenue.

Security researchers at Symantec have found that the Flashback Trojan downloaded an “ad-clicking component” through a Java vulnerability. From there, it would hijack clicks on ads through Google. You know the links that show up in a yellow box at the top of your Google search query? Yeah, those make the search giant a ton of money. Ninety-six percent of Google’s overall revenue comes from advertising revenue through its search engine and other advertising programs. And when your revenue sits at $37.9 billion for 2011, cyber criminals have an incentive to steal some of that.

The people behind the Flashback Trojan may have been making up to $10,000 a day, according to Symantec. They did this by infecting the Mac’s browsers (Firefox, Chrome, or Safari). The Trojan then waited until someone searched for something on Google and clicked on an ad. From there it redirected the user to a site of its choosing, getting in between Google and the advertising click, and eventually collecting the revenue from that click.

Symantec looked at a search query for “toys” made on an infected machine.

“We can clearly see a value of 0.8 cents for the click and the redirection URL highlighted in red. This redirected URL is subsequently written into the browser so that the user is now directed to the new site, in effect hijacking the ad click Google should have received,” Symantec wrote in a blog post. “Considering the Flashback Trojan measures in the hundreds of thousands, this figure could sharply rise to the order of $10,000 per day.”

The Flashback Trojan enters a computer through a hole in Java, which Apple has since patched.

Trojan image via Shutterstock

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Application developers may start to lose up to 24 percent of advertising revenue as Apple turns away applications using UDID, or unique device identifier, data.

“The move away from UDIDs threatens advertising revenue that many publishers depend on in order to support their content creation and businesses,” said Jim Payne, co-founder of MoPub, in a statement. “It’s clear that Apple needs to address this issue with an appropriate alternative, because the damage to a publisher’s bottom line will likely be material if UDID data actually disappears.”

Advertisers look at UDID data to determine the level of success a campaign may have in a certain app. It can tell you the types of users that will see the ad, and it delivers conversion data on each user (for instance, if an advertisement has led to a person downloading a new app). It measures “an ad’s effectiveness and value,” MoPub explained.

Advertisers pay by impression, or who sees the application. Without that data, advertisers are taking a greater risk deploying campaigns. They are unable to tell whether that impression is really valuable, and are thus are less likely to pay big amounts for those impressions. According to MoPub, an eCPM, or cost per thousand impressions, with UDID data could fetch .76 cents, whereas one without the data would only bring in .58 cents.

That adds up and for apps that rely on advertising revenue, this can take a big chunk out of their livelihood.

Apple decided to turn away applications using UDID because of privacy concerns. Individuals did not want their unique identifier being shared with advertisers. And with debacles like Path and other major apps using the address book to gain new users without permission, mobile privacy is in the spotlight. Developers are going to need to find a new way to prove their user quality or risk losing out.

Image via Tom Cheredar