Search Apps Stealing Mobile Search Ad Revenues from Google [Report]

Google’s dominance in paid search is taking a hit from the number of mobile apps that users are using on a daily basis, apps that often use alternative sources of revenue generation outside of Google ads. according to a new eMarketer report.

The trend of mobile advertising shows that it will account for 85.9 percent of digital ad search dollars by 2018, according to eMarketer’s study, reaching a projected $28.41 billion.

US Mobile Search Ad Spending 2012-2018

However, Google’s massive share is forecast to drop by a significant amount, from 82.8 percent in 2012 to only 64.2 percent by 2016.

Net US Mobile Search Ad Revenues 2012-2016

While Google will clearly still dominate, it’s a significant amount of revenue that Google will be losing.

Google isn’t likely to lose its top position, but its decline in share reflects the diminished role of browsers on smartphones. The analytics firm Flurry estimates that consumers spend 86% of their time on mobile inside apps. For eMarketer, their search ad forecast needed to be adjusted to capture this behavioral shift.

“People don’t look at their smartphone and think, ‘Oh, I’ve got to look at my browser,'” said Cathy Boyle, senior mobile analyst at eMarketer.

How Google compensates for the loss of mobile app revenue remains to be seen. While they do offer some in-app advertising options, some advertisers are also reluctant to see their ads in apps, especially certain types of games where it is easy for someone to accidentally click on an ad, without chance for the advertiser to convert those types of clicks.

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