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Facebook and Instagram Now Dominate Mobile User Time

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Mobile traffic now accounts for 78% of Facebook’s overall ad revenues

Mobile use has become an integral part of all Internet companies. According to Facebook (FB), an average adult spends 25% of their media time on mobile devices. The company also claims that Facebook and Instagram together now account for 20% of users’ mobile device time in the United States. This has resulted in Facebook’s revenues from mobile ads increasing fast. In 3Q15, Facebook’s mobile ad revenues grew 73%. Mobile use now accounts for 78% of Facebook’s overall ad revenues. The chart below shows how mobile use continues to grow in importance for Facebook.

According to Facebook, strong advertiser demand, an increase in users’ time spent on Facebook’s platforms, and an increase in ad load on mobile devices are driving mobile revenue growth.

Facebook gaining share from Google in the mobile ad market

According to a report from eMarketer, Facebook will gain share in the US mobile ad revenue market from 18.5% in 2014 to 19.4% in 2015. Alphabet (GOOG) will lose share from 36.9% to 32.9% during the same period. Twitter (TWTR), Yahoo (YHOO), and Apple (AAPL) will remain the smaller players in this market. This shows that Facebook’s main competitor in the mobile ad market is still Google.

Google is also making some progress on the mobile front. Earlier this year, the company announced that more searches are happening on mobile devices than PCs. Google has also started to focus its efforts on indexing mobile apps just as it has emphasized indexing web content over the years. To gain diversified exposure to Google, you can invest in the PowerShares QQQ Trust, Series 1 (QQQ). QQQ invests about 4.6% of its holdings in Google.

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