Will Facebook Inc (FB) Be The Biggest Beneficiary Of Mobile Advertising?

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What was once termed as weakness has now turned a strength for Facebook Inc (NASDAQ:FB). When the company went public a few years ago, mobile advertising was considered a weakness of the company and something it needed to improve on. However, it now enjoys solid mobile internet traffic with a leadership position.

Therefore, it is quite obvious that Facebook Inc (NASDAQ:FB) stands to gain by the explosion of mobile advertising in the United States. Over the years, it has not only shut the mouth of the pessimists, but also delivered better than expected earnings due to growth in mobile advertising.

Mobile Advertising

According to a report in Business Insider, mobile advertising would witness a faster pace of growth than all other formats of digital advertising in America. The advertisers also preferred to allocate more dollars towards mobile advertising.

In the five-year period commencing from 2013 to 2018, spending in mobile advertising would reach about $42 billion representing 43% compound annual growth rate or CAGR during the same period.

Display and video would the quickest emerging mobile ad formats in line with the shift to smart devices from desktop. An interesting aspect of the report was that the mobile display in the U.S. would grow at an unbelievable CAGR of 96% in the five-year period running up to 2018. Similarly, mobile video ad revenues would grow at an amazing CAGR of 73% in the same period.

Facebook To Gain

While Facebook enjoys a peak mobile internet traffic of 19%, Google Inc (NASDAQ:GOOGL)’s YouTube enjoys 18% mobile internet traffic. Together, they enjoy 37% of mobile internet traffic. The third place is enjoyed by Web Browser with traffic of 11%.

While both Facebook Inc (NASDAQ:FB) and YouTube set to reap a rich harvest from the exploding mobile advertising market, it would be the social networking company that would gain the most if the numbers are of any indication.

Facebook Inc (NASDAQ:FB) has recently updated its search tool to provide users with an option to view the old posts. The company has been constantly updating its search in line with the users’ expectations. These factors would also go in favor of the company benefiting the most from the mobile advertising growth.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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