Mobile is king, and capturing the dramatic increase in mobile ad spending will be a boon for those companies ready to reap the rewards. Search and online advertising behemoth Google (NASDAQ:GOOGL), with its Android OS, is a natural to benefit from higher spending on mobile advertisements. With more than 80% of the global smartphone OS market share, Google already has a leg up in mobile.
But Google isn't the only option for investors intrigued with the impact of mobile ad spending. There are a couple alternatives that could enjoy a jump in revenue and earnings from mobile, and one particularly intriguing.
According to a recent eMarketer report of 2013's third-quarter mobile ad spending, advertising revenue jumped "well over 100%" compared to last year and should end 2013 up 105.9%. Mobile ad spending is expected to increase another 62.1% this year to about $20.3 billion, and to continue rising to an estimated $72.3 billion by 2017.
Who's spending all that money to market their goods and services? The top five industries, as measured by year-over-year growth in 2013's third quarter, were pharmas, news, sports, consumer goods, and entertainment companies. The objectives of marketers using mobile ads included leading users to an Internet site, building a sustained mobile presence, and driving brand awareness.
The explosive growth in mobile advertising provides huge opportunity, particularly for companies that have already initiated a strategic mobile plan but have yet to fully realize its potential. In addition to Google, which is already firmly established in all things mobile, Facebook (NASDAQ:FB) and Yahoo! (NASDAQ:YHOO) are seeing outstanding results in their mobile efforts. Even better for investors, both still have loads of potential.
The cases for Facebook and Yahoo!
Facebook CEO Mark Zuckerberg made an increase in mobile users a priority some time ago, and he needed to. It was only a year and a half ago, give or take, that the industry was bemoaning Facebook's mobile miscues. At the time, Facebook had 901 million active users around the globe, but only 488 million were mobile. That was still a significant number, but also a missed opportunity.
Today, Facebook's mobile initiatives can be seen in virtually everything it does. If there's an update to Facebook's user experience, you can bet it'll be mobile-ready. And Zuckerberg's efforts are paying off, big time. Now, of Facebook's 1.19 monthly active users, or MAUs, a whopping 874 million are mobile.
Like Facebook, Yahoo! is focused on providing mobile users with a better experience and gaining some advertising revenue along the way. As it relates to mobile ad spending, Yahoo! offers the most upside to investors, even more so than Google and Facebook. CEO Marissa Mayer's efforts have resulted in a 33% jump in mobile MAUs, to 400 million, in the past year alone -- but that represents only half Yahoo!'s MAUs. And that translates to opportunity.
Another factor that makes Yahoo! an intriguing investment option is its emphasis on content, even as it continues to generate a substantial portion of revenue from search. Of the top five industries growing their respective mobile ad spending the most, three are of special interest to Yahoo! fans: entertainment, sports, and news. One trip around the site makes it abundantly clear that Yahoo! is becoming content-driven, and those industries are leading the way.
Final Foolish thoughts
The dynamic increase in mobile advertising revenue is going to have a big impact on companies ready to take advantage of this development. Google and Facebook will both reap the benefits and remain solid investment alternatives. But for the more aggressive Fools, the potential of Yahoo! with its 400 million nonmobile users, and its emphasis on content, offers investors a unique opportunity.