Krishna Baidya’s Random Musings

Mobile Advertising Is Shaping Up To Be All Search

Posted on: October 7, 2009

Mobile advertising market is emerging as a huge growth area with the rise of web phones like the iPhone, Android, Blackberry and Palm. According to the Kelsey Group, a market research firm, the mobile advertising market will balloon from $160 million in 2008 to $3.1 billion in 2013.

Of course, that is just an educated guess which will turn out wrong. But there is no doubt that mobile advertising will be much bigger in four years, perhaps even ten to 20 times bigger than it is today.

Where will all of that mobile ad money go to? Display ads are projected to go from 13 percent of the total to 18 percent, while SMS ads will decline as a percentage from 63 percent to 9 percent (see charts). So once again it looks like search is going to be the big winner. No wonder Google is so focused on mobile search as one of its major sources of growth.

US Mobile Advertising Revenue

Think about it. Display ads take up precious real estate on your phone screen and tend to just get in the way and be an annoyance. That’s whymost people don’t like them . But when you are doing a search on your phone, you are often looking for something nearby?a store, a restaurant, a dry cleaner. You are more open to ads, especially if they are relevant to your search. As reported by TechCrunch, the Kelsey Group also projects that mobile search will go from 24 percent of the total mobile ad market last year to 73 percent of the much larger pie in 2013, according to a recent research note put out by Citi Analyst Mark Mahaney. He said that Mobile search is particularly tuned for local search ads. “Given the nature of mobile devices, local queries on mobile should, over time, be greater than local queries on the desktop,” he added.

Indeed, the Kelsey Group predicts that local searches will rise from 28 percent of all mobile searches in 2008 to over 35 percent by 2013. And as a percentage of mobile search ad revenues, local search is already half so that it will be a $1.27 billion market opportunity in four years just for local mobile search.

Source: Silicon India, Washington Post

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