New predictions for the mobile search advertising market claim revenues are set to soar over the next 5 years. Whilst only last month the value of this market was estimated to be $83 million, the latest forecasts this month predict that mobile search ad revenues could reach $4.8 billion by 2013.
At present, data charges from mobile search far exceed the income generated from advertising. However, this trend is changing rapidly as more and more operators offer flat rate tariffs and all you can eat data packages. As operators bring down their walled gardens, more content owners and developers will be able to take advantage of the market, eventually attracting more consumers.
Juniper Research‘s estimate of $4.8 billion by 2013 may seem very far off at present, given that last year global mobile search advertising brought in less than $100 million.
Google has, however, reported a 20% jump in mobile search usage in recent months, owing to the improved user experience offered by the search application on handsets and improved handset design, as well as flat-rate data tariffs.
40% of the money spent on mobile ads is expected to be earmarked for local search ads, according to the report from Juniper Research. This too seems unlikely at present, given the recent doubts cast over the actual popularity of mobile local search.
However, current trends could change if application developers and search providers create a more compelling proposition for consumers, who would then be more inclined to take advantage of the benefits of geo-specific services and advertising.
China and the Far East are expected to be the main revenue generating regions, followed by Western Europe and North America, in that order. Current trends in China, India and the Far East definitely point towards this prediction coming through. The world’s largest mobile operator is China Mobile, followed by Vodafone and then China Unicom. These volumes will naturally attract more advertiser dollars.
Google CEO Eric Schmidt has repeatedly spoken about their plans to expand the AdWords mobile advertising programme. Google has already forged partnerships with the leading manufacturers like Nokia and BlackBerry as well as the largest operators including China Mobile and Vodafone. Yahoo! has similar tie ups with T-Mobile and Hutchisonâ€™s 3.
At the end of the day, the success of the mobile search industry rests in the hands of the consumer. Consumers will decide whether they will adopt the mobile Internet at the rate analysts are predicting and whether they will react to mobile search advertising as receptively as they do on the wired Internet.