Search ads will take up 73 percent of the mobile ad spending

Oct 7, 2009 14:42 GMT  ·  By

The web is going mobile in a big way. With increasingly powerful smartphones boasting full HTML browsers, screens large enough to make browsing feasible and network connections capable of handling the task, the market is really starting to pick up. But with more users comes more advertising money and the ad market for mobile phones is expected to skyrocket in the coming years, going from $160 million last year to $3.1 billion by 2013 according to predictions by Kelsey Group, a market research firm.

But the interesting part is not its growth but the distribution of the different ad types. At the moment mobile advertising is dominated by SMS ads, which take up a 63 percent slice. Search ads come in second with only 24 percent and finally display ads grab the remaining 13 percent. The distribution is dictated by the capabilities of mobile phones used today. Despite a big rise in smartphone sales the majority of people still carry the un-smart phone variety.

However, this is expected to change dramatically as, already, smartphones take up a large percentage of new mobile phone sales. In the coming years it is expected that the majority of new phones, especially in developed countries, will have advanced capabilities like a fully fledged web browser. The forecast by the research firm anticipates this growth and expects search ads to shoot up dramatically to become the biggest revenue generator by a very large margin.

By 2013, search ads are expected to be 73 percent of the mobile ad market followed by display ads, which will see a more modest growth to 18 percent. SMS ads though will be largely abandoned on the whole, managing to get just 9 percent of the advertising money. Of course 9 percent of $3 billion is more than the entire mobile ad market today. While the numbers can be debated, the overall trend is likely to be close to the estimates, search, especially local search, will most likely play a very important part in mobile web browsing.