Total mobile advertising spending will reach $18 billion in 2014, according to recent research from Gartner, and at the center of this industry is a fierce battle between Google and Apple. Google’s Android operating system dominates the market share, but Apple’s iPhones still take the majority of revenue.
Apple iOS operating system and Google’s Android are by far the most popular smartphone systems on the market, and the rivalry between the two has always been fierce. Google’s Android is used by a number of manufacturers, although Samsung has had the most success with it. Apple has kept its operating system to itself, and still manage to claim a significant chunk of the market.
Late last year Google’s Android devices overtook Apple’s iPhones in the race for global advertising impressions on the Opera Mediaworks network, which covers 425 million users and 60 billion impressions monthly. Advertising impressions refer to the number of times adverts are displayed, regardless of whether they are clicked on, and in this respect Android now has the edge.
In the fourth quarter of 2013, devices using Google’s operating system accounted for nearly 36 percent of advertising impressions on the Opera Mediaworks network. In contrast, iPhone impressions stood at just under 29 percent of the network. These figures will worry Apple executives, as they are just the latest to suggest Android is taking over the market.
In 2013, the number of apps created for Google’s Android operating system eclipsed that of Apple’s iPhone for the first time, according to data collected by Evercore’s Paul Deninger last year. Both companies know that content will play a huge role in deciding the outcome of this battle. If the Android platform draws more app developers than Apple, advertisers could follow.
But the media and analysts often blow the importance of market share way out of proportion. A company concerned only with dominating a market can do so with ease, but usually at the risk of negligible profit margins.
The data from Opera Mediaworks shows Apple dominates the share of revenue from mobile advertising on the Opera network. Across all mobile devices over the quarter, Apple took a 56 percent slice of revenues, compared to Android’s 32 percent.
This trend extends to the wider smartphone market, where Google enjoys the market share, and Apple grabs the profits. Canaccord Genuity analyst Michael Walkey revealed in November that in the third quarter of 2013, Apple took a 56 percent share of profits in the smartphone sector. Its nearest rival was Samsung, which took 53 percent. The two were able to grab 109 percent of the profits because the other companies in the same space lost money.
Android devices accounted for 81.0 percent of all devices shipped in the third quarter of 2013, according to IDC research, yet only Samsung made any kind of profit from smartphones built around that operating system. Apple, despite holding just 12.9 percent of the smartphone market, makes the most profit out of it.
The news of Android gains in mobile advertising will certainly concern Apple. But the company can take solace in the reassuring fact that it rakes in the lion’s share of cash.