Yesterday Google announced mobile image ads. The ads are displayed on the mobile sites of publishers that are participating in AdSense for mobile (or that opt-in to the new program). Mobile image ads are created in users’ AdWords accounts and require more or less the same type of setup as traditional AdSense ads. The image ads are keyword targeted, priced on a PPC basis, and must be associated with a mobile URL (rather than an HTML page), so a mobile site or landing page is a prerequisite to participating in the program.

However, Google hosts mobile landing pages for advertisers that don’t have mobile sites.

Google has said that it will optimize ads for best performance for publishers that are running both text and image ads on their sites. The company also told Reuters that in early tests CTRs have been good.

The potential benefit for display advertisers is that they pay on a PPC rather than a CPM basis, which is the model that characterizes most mobile display advertising today. The other side of that, however, is that if the ads aren’t generating CTRs they probably won’t be shown over time — so there’s no guaranteed placement.

Mobile image ads are being launched in Australia, China, France, Germany, India, Ireland, Italy, Japan, Netherlands, Russia, Spain, the UK, and the United States.

The following video explains the process pretty clearly:

Related Topics: Google: AdSense | Google: Mobile

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling