YP issued a press release this morning saying that the company has “over $350 million in advertising revenue [in 2012] attributable to mobile, making it the number two company in the US mobile advertising industry.” IDC is the third party validating the claim in the release.
Other facts in the release:
- YP said that it had total digital revenue of “nearly $1 billion” in 2012
- Mobile is now more than 40 percent of total searches across across its various properties in 2012
- YP says its Local Ad Network includes more than 300 online and mobile publishers
The language used in the release — “attributable to mobile” — suggests that YP is doing a calculation re some percentage of SMB ad spend that is distributed in mobile but not necessarily sold as mobile advertising. I’m not arguing the revenue claim is illegitimate; however the implication is that SMB advertisers aren’t buying mobile specifically. They’re probably buying a package that includes mobile distribution.
There are a range of local-mobile ad networks in the US: YP, xAd, JiWire, Verve, LSN, Sense Networks. Collectively they probably come in under $600 or so million in revenue (for 2012), with YP generating the largest chunk of that.
Google and other more conventional ad networks of course also offer geotargeting. Google doesn’t disclose its mobile paid search revenue or its mobile display revenue beyond saying that it now has an $8 billion mobile run rate (includes non-ad revenue).
By my calculation Google probably made something something in excess of $1.5 billion in US mobile search revenue in 2012 (this is a rough number). Some percentage of that is local or geotargeted. Some small piece of display revenue will also be geotargeted.
Based on some visibility into this from Wordstream my sense is that well below 50% of Google’s paid search revenues are geotargeted (it’s probably more like 20% or less). Let’s assume for argument that 20% of Google’s mobile paid search advertising is today geotargeted — how Enhanced Campaigns will impact this is still uncertain — that would suggest about $300 million in mobile paid search was local or location specific in 2012.
Let’s say then, just to use some round numbers, that about $1 billion or so of US mobile ad revenue today has a location-specific target. Most of Facebook’s mobile ads right now aren’t geotargeted.
I’ve projected that mobile ad revenue in the US will come in around $3 to $3.5 billion for 2012. That would make location-based ads roughly 28% to 33% of total mobile ad revenues. I’m working on a more precise version of this. (However the definition of location-based ads becomes a challenge in this exercise.)
What do you think of YP’s assertion about its place in the US mobile ad ecosystem? And what do you think of mine that location based mobile ads are now about a third of the total value of mobile advertising (which may be high)?