Mobile advertising is dominated by two giants, Facebook and Google. In fact, 85% of mobile advertising spend goes to those two channels, and they both now identify mobile as a primary area of importance for future growth. Facebook's mobile revenue is projected to grow by more than 50% year over year, with Google's growing at a healthy 20%.
How did Facebook and Google come to dominate the top of the mobile ad food chain? For starters, each boasts a network of more than a billion daily users. This enables both companies to offer high-quality targeting at a massive scale that most other channels can't replicate.
Facebook predicted early on that highly targeted app installs would be popular with advertisers. It guessed correctly, and now Facebook's mobile ad practice fuels more than 80% of its $5.2 billion annual advertising revenue stream. Meanwhile, Google has long been the dominant player in search advertising, which makes up the bulk of the $19 billion it earns in advertising revenue. Mobile is playing an increasingly important role as more than half of Google searches are now done on mobile, which some analysts estimate account for more than half of Google's ad revenue.
Despite such dominance, marketers run the risk of relying too much on these two networks to deliver the marketing results they need. Advertisers can't accurately see into the walled gardens that these giants create, and that lack of transparency can create problems for non-diversified ad campaigns—such as finding out that metrics are being artificially inflated.
Using Facebook or Google isn't a bad plan: Whether they're running broad campaigns or precise targeting, most advertisers on mobile will find Facebook and Google to be effective. But marketers who also seek the help of other players in the market will be more successful in the fight for mobile customers.
Spreading spend across a variety of channels presents the highest likelihood of optimal ad performance. From contributing third-party tracking tools and data, to verifiable metrics and alternative personas, a diverse portfolio of advertising channels and platforms can effectively complement efforts on Facebook and Google, as well as minimize risk.
Using a multitude of ad channels allows one platform's strength to make up for another's weakness—and vise-versa. By focusing on one channel only, marketers subject themselves to risk—poor targeting, low reach, limited reporting.
For marketers wondering when the right time to diversify might be, consider the following:
- If you're noticing that your advertising is flatlining, or not seeming to resonate with your target audience, it may be time to diversify. For example, Facebook may be targeting "pet owners," but it's really just reaching people who like looking at pictures of puppies. Just because a campaign is focused on a defined group of users, doesn't necessarily result in accuracy.
- During the holiday gift-giving season, an influx of new phones and tablets creates all new opportunities for marketers, as users of those new devices tend to download new apps. That tendency continues for weeks, so the post-holiday lull provides a great opportunity to get the most bang for your marketing buck: As major spending dies down, ad costs fall back to earth.
- If you're having to spend more than expected on Facebook, don't be surprised. It's a highly effective and popular platform, which means that demand continues to increase, leading to a competitive advertising environment. As Facebook gets more expensive, marketers may want to consider devoting a greater portion of their ad budget across other platforms.