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Facebook ads growing dramatically

Apr 04, 2013

FORTUNE -- After several years of gloomy predictions for mobile advertising, the business is enjoying incredible growth. Precisely how incredible depends on whose numbers you look at.

Last month, Pew Research reported that revenue from mobile advertising grew by 80% in 2012, to $2.6 billion in the United States. Today, eMarketer reported that the market grew by 178%, to $4.11 billion.

Which report to believe (if either) is almost beside the point. The trend is way up, and mobile ads are eating into other forms of advertising, including "traditional" online ads and advertising in general. How much of a share mobile will ultimately take is unknowable, but for the time being, the growth will continue: eMarketer says the U.S. market will rise another 77% next year, to $7.3 billion. By 2017, the market will represent nearly half of all digital ad spending and will make up nearly 14% of the total ad market, according to eMarketer.

MORE: Android: Facebook's new weapon against Google

Facebook's (fb) first mobile-only ad appeared only last August, and now, according to Pew,  such ads make up about a quarter of the company's revenue. It can no longer be said that this isn't a real business, though of course ad rates remain low and reaching people via mobile devices remains an immense challenge.

But on mobile just as on the wired Internet, Google (goog) is still dominant. More than half of all mobile-ad revenues in the U.S. went to Google. It absolutely overwhelms the search-ad market, with a share greater than 93%. Facebook is tops in the mobile display-ad market, drawing 9.5% of all display revenues last year despite its late entry into the market. Twitter has seen similar growth. Social media seems to be a natural platform for display ads since -- in the form of "native advertising" -- they are so easily inserted into people's feeds.

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