Second Quarter Earnings Reports Show Big Gains for Mobile Advertising

For large tech companies depending on mobile advertising revenue, the second-quarter earnings reports released last week brought welcome tidings, perhaps even unbridled happiness. As years of investment in mobile technology and advertising come to fruition, companies like Facebook, Twitter, and Google parent company Alphabet all saw gains due to revenue from mobile business.

These results speak exactly to the importance of mobile for social networks. Of Facebook’s $6.2 billion in advertising revenue, $5.2 billion, or 84 percent, came from mobile advertising, while 91.9 percent of Facebook’s monthly active users were active on mobile. Twitter recorded $535 million in advertising revenue, with $476.15 million, or 89 percent generated by mobile. Large numbers like these are representative of the shift in advertising to digital, and more specifically from desktop to mobile.

It’s not just social-based companies that are taking advantage of the mobile segment, either. Advertising on mobile overall grew by 63 percent in the second quarter from last year. Just look at search giant Google. Investors had recently been concerned about the company’s plans outside of search, but after posting a 24 percent increase in total quarterly revenue, its stock rose 4 percent. So how does a search company post gains like that as the search business, while still growing, slows down? They shift to mobile.

“The strength of the quarter is about mobile,” Google’s CEO Sundar Pichai said last week. “Our investment in mobile now underlines everything that we do today, from search and YouTube to Android and advertising.” People outside the company are taking notice as well. Mark Mahaney, an analyst with RBC Capital Markets, was quoted recently as saying, “The big overhang of concern on Wall Street was that Google’s best days are behind it and that search is a dramatically maturing business. I think they just proved that’s not the case. More smartphones means more use of Google, and YouTube, too.”

Facebook also sees opportunities to increase revenue with search. It has updated its search engine so that it now looks for not only people, but also comments, rivaling what Twitter aims to do with its search engine. This provides another avenue for Facebook to serve up digital, and more specifically mobile, advertisements.

The techniques and technology used by companies like Google and Facebook provide a much-needed boost in user experience for mobile advertising. Each brand has built its own way of delivering faster mobile content—Facebook with Instant Articles and Google with its AMP project—and now they are seeing the rewards of concentrating on mobile. But you don’t have to be one of the top two tech companies in the world to invest in the mobile space and develop a good strategy for advertising there. It’s a business design that any smart and forward-looking publisher can repeat.

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