Mobile advertising to hit US$11.35B; Will Google stay No.1 in Mobile Search?

Worldwide spend on mobile advertising will rise to US$11.35 billion by 2011, up from $871 million this year, according to Informa Telecoms & Media report "Mobile Advertising Services: generating revenue through subsidised content".  In 2007, mobile advertising spend will more than double from 2006 levels to over US$1.5bn. 

Infroma forecasts that search-related mobile ad revenue will climb to $1.5 billion in 2011, up from just $3 million this year.

 Google, the online search titan, is fighting for a piece of the nascent cell phone search market. In April, Google began testing mobile text ads in Japan with KDDI, the country's No. 2 carrier. Google has also partnered with Vodafone in the U.K. and T-Mobile in Germany. In the U.S., though, none of the big wireless firms features Google as the search engine on home pages.

In September Verizon Wireless debuted its free Get It Now search service, using technology from search startup Medio Systems. Medio's service allows ads to be placed near search results. Cingular is reportedly working with another mobile search startup, JumpTap, reports IBD. Startups active in mobile search include 4Info, Promptu and V-Enable. Several startups are developing voice-based mobile search. 

Google has made several mobile-related acquisitions, including Neven Vision in August for its visual search technology; Dodgeball, a mobile social-networking service in 2005; Reqwireless in early 2006, Android in 2005 and Zipdash in 2004.

Google ranks No. 1 in wireless searches, say two research firms, M:Metrics and Telephia. Telephia has ranked Yahoo Mail as the most visited site by mobile consumers.

The potential economies of scale that the mobile channel offers advertisers will prove a powerful draw - Informa Telecoms & Media forecasts that there will be over 2.1 billion mobile subscribers worldwide by the end of 2006, rising to nearly 4 billion in 2011. Issues that need addressing to enable advertisers to realise this reach however, include consumer acceptance, technology (screen size, available bandwidth, interoperability between operators and handsets) and industry regulation.

There are now more users with advanced multimedia handsets and the number of subscribers who connect to mobile broadband via 3G and HSDPA is growing significantly. Consumer interest in multimedia mobile content is also growing and areas like mobile TV, and 'off-portal' search are becoming more popular." 

Findings from an industry survey conducted as part of research for the report highlight that the only areas in which consumers are currently "not at all willing" to receive mobile advertising was via SMS/MMS. Other modes of delivery for mobile advertising will include via mobile music delivery, mobile game delivery, mobile TV & video, idle-screen advert delivery and via user generated content and community sites. It seems that consumers generally accept mobile advertising in return for 'free' media and applications on their handsets.

New mechanisms for mobile advertising enable advanced models for selling value-added services to consumers as well as providing revenue from the advertisers directly. This provides a strong incentive for operators to address compatibility and interoperability issues.

The mobile phone represents a direct channel to the consumer, surpassing that of the Internet, but will only achieve significant levels of success if it can be seamlessly integrated with existing advertising strategies using traditional media.

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