Strata

Android Gaining On Apple In Mobile Ads

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Originally appearing in INVESTOR’S BUSINESS DAILY, by By Pete Barlas on 09/14/2011 

Android is trailing Apple (AAPL) in the mobile display ad game, but probably not for much longer.

Advertising agencies still prefer Apple for their clients display ads over Google’s (GOOG) mobile operating system, but Android’s fast growth could level the playing field in the next year or so, analysts say.

Nearly 87% of ad agencies called Apple’s iPhone a preferred destination for mobile display ads in the U.S., with Android No. 2 at 62%, according to a quarterly poll released last month by STRATA, a maker of software that helps companies buy and monitor online ads.

Apple is favored even though Android — an open-source mobile operating system used by many makers of mobile devices — leads in market share. In July, Android had 41.8% U.S. smartphone market share, up from just 17% a year earlier, says market tracker ComScore. Apple was No. 2 at 27%, up from 23.8%.

Quick Rise In Poll

Apple has been king of the hill for mobile display ads, but that lead is being challenged, says STRATA spokesman J.D. Miller. “Android is definitely catching up,” Miller said, noting that Android’s 62% showing is way up from 46% in the year-earlier poll.

Consumers still swoon over iPhone’s sleek design, large screen suitable for video and ease of use. But in the past year, more handset makers have brought more Android handsets to market.

“Apple still retains a sort of halo quality for advertisers,” said Noah Elkin, an analyst with research firm eMarketer. “But as Google has brought out newer versions of the Android operating system and made improvements to Android’s marketing, it’s made Android a more appealing platform.”

For its first three fiscal quarters ended June 25, Apple sold more than 55 million iPhones vs. more than 40 million in 2010.

As of July, Google said 135 million mobile devices were operating with Android, up from 100 million in May. In July, Google said the number of daily Android activations was 550,000.

MoreVisibility, an online marketing services company, says the number of clicks on mobile display ads served by its advertiser clients is about even between Android and iPhone.

“It’s been that way for the past few months,” said Danielle Leitch, MoreVisibility’s executive vice president of client strategy.

IPhone ‘Kind Of Flat’

But 2010 was a different story.

“The iPhone was stronger last year,” she said. “The difference (this year) is that while the iPhone stayed kind of flat, the Android referring traffic has continued to grow by leaps and bounds.”

Apple, Google and others are fighting for what is fast becoming a huge market for mobile display ads.

Mobile display ad sales in the U.S. will jump to $887.6 million in 2014 from just $91.4 million in 2009, says eMarketer.

Yet, only a small percentage of MoreVisibility’s more than 200 customers are buying mobile display ads.

One reason is that many companies haven’t yet adapted their Web sites to mobile devices. For example, only about 40% of MoreVisibility’s clients have mobile websites.

But that’s changing fast, Leitch says.

“It’s still a small screen (for display ads) no matter how sophisticated and advanced the devices are, but a couple of years from now it won’t even be a question if you have a mobile version of your website,” she said. “It’s just going to be part of your marketing effort.”