According to a report by eMarketer, Yahoo is expected to end 2014 with about 3.2% of the nearly $19 billion mobile advertising market. Based on their calculations, Yahoo is expected to take 3.74% of the market share, bypassing Twitter’s expected 3.69% share. Surpassing Twitter puts Yahoo in third place overall for mobile ad sales in search and display, still trailing enormously behind Google and Facebook, which currently have 37.66% and 14.36% shares, respectively.
Still, this is huge news for Yahoo. The 1% increase is the largest of any of the companies that eMarketer tracked, and by 2016, the total amount of money spent on mobile ads is expected to exceed $40 billion. Additionally, Yahoo’s mobile audience has more than doubled since the end of 2012, going from around 200 million to over 550 million as of Q3 of this year.
The “Moneyball” Team
Per Bloomberg, much of the credit for the major growth in advertising market share goes to Yahoo’s CEO Marissa Mayer and the company’s “Moneyball” team, named after the Oakland Athletics baseball team’s approach to analytical problem solving. Mayer reportedly gave a group of employees the challenge to create an ad feature that would work on mobile devices and desktop personal computers – and she gave them a scant 45 days to complete the project. Just 43 days later, the team returned with a new service and began laying the groundwork for the technology that would help drive the company’s increase in market share.
It’s also important to note that before Mayer’s arrival, Yahoo was paying almost no attention to mobile ventures, just about literally. Less about 1 percent of their workforce, around 50 people, were tasked with working on technology for smart phones and tablets – essentially a rounding error. Currently, there are about 600 people working on mobile developments.
The Cloud’s Smoky Grey Lining
While there’s no question that Yahoo has made tremendous progress, they’re still at the foot of, not a hill but, a giant mountain of competition. As the SF Gate points out, if you only look at mobile display ads:
Yahoo is in sixth place–behind Apple, Pandora, Twitter, Google and Facebook.
Additionally, their portion of the mobile search market is fairly small; just a 4.9% share, and it’s only expected to grow to 5.2% by 2016. They’ll also be facing stiff competition from other advertisers for both search engine share and mobile marketing dollars.