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Google, Facebook drive mobile ad market growth: report

Mon, Dec 17 14:01 PM EST

By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Google Inc's mobile ad revenue in the United States will be roughly $4 billion next year, while Facebook Inc's nascent mobile advertising business will more than double, according to a new study by research firm eMarketer.

Marketers are boosting spending on ads that reach consumers on smartphones and tablet PCs at a much faster than expected pace, eMarketer said on Monday. The firm said it expects that overall U.S. mobile ad spending in 2012 will increase 180 percent year-on-year to more than $4 billion -- a sharp revision from its forecast in September which sized the market at $2.61 billion.

Internet search engine Google is expected to remain the top player in the market for the foreseeable future, with revenue reaching $6.33 billion in 2014, eMarketer projected. Google's mobile ad revenue, will increase roughly 84 percent in 2013 to reach $3.98 billion.

Facebook mobile ads in the United States will total $339.3 million in 2012 and rise to $851.4 million in 2013, eMarketer said. The firm's figures are based on an analysis of data from research firms, investment banks and "other sources" on ad revenues, ad impressions and ad prices.

While Facebook offered no mobile ads on its social network at the beginning of the year - a factor that has pressured its revenue growth and its stock price - the company's mobile ad business grew at an "unexpected" rate in the third quarter, eMarketer said.

Online music streaming service Pandora Media Inc, microblog Twitter and iPhone-maker Apple Inc round out the top five U.S. mobile ad business by revenue, according to eMarketer.

Mobile ad revenue at the privately-held Twitter, which does not disclose its financial results, will reach $134.9 million in 2012 and grow to $248.9 million next year, eMarketer said.

Consumers are increasingly using smartphones instead of, or in addition, to PCs to surf the Web and to use online applications such as video games and music streaming services. More than half of Facebook's 1 billion users accessed the social network on a mobile device in September, the company said in its most recent 10Q filing.

Mobile advertising remains a small portion of the total U.S. advertising market, accounting for 2.4 percent of all spending in 2012 compared to 38.9 percent for television, eMarketer said. But mobile ad spending will overtake ad spending on radio and newspapers in 2016, the firm estimated.

(Reporting By Alexei Oreskovic; editing by Andrew Hay)