Generally ads follow usage. The Internet Advertising Bureau estimated $42.78 billion went into Internet advertising last year, up 17% from a year earlier. Mobile ads represented just $7.1 billion of that total, but that was more than double 2012's figure, a compound annual growth rate of 123% since 2010.
But the usage trend is not yet reflected in the flow of ad dollars, according to Flurry, which found that Google continues to get almost half of all mobile ad dollars despite having 18% of usage, while the "other" category served by companies such Namo are getting 65% of usage but just 33% of the revenue.
Twitter's purchase may thus be seen as an inexpensive way to get in front of this flood of money and to try and to consolidate the space, which like the mobile apps themselves are diffused among dozens of players. A study from AppFlood last year showed 50 strong players in the mobile ad network space, including AppFlood itself.
Unlike other mobile deals, this isn't a slam dunk. We know Facebook will get traffic through WhatsApp, while Twitter is now just one player among many seeking appmakers' loyalty. But this is a quiet deal that makes good sense.
At the time of publication the author owned shares of GOOG.
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