Report: Search To Dominate Mobile Advertising By 2015

Online search is largest slice of the advertising pie, with 49 percent of all spending according to the IAB’s recent report. But paid search has also been significant in driving mobile advertising revenues.

Source: IAB

A new mobile ad spending forecast out today from eMarketer argues that US mobile advertising revenues will cross the $1 billion threshold and reach $1.2 billion this year. Of that SMS-based marketing contributes 44 percent and search represents 28.5 percent or $349.4 million.

According to eMarketer paid search will assume the lead in 2013. By 2015 mobile paid search will be dominant, with more than 40 percent of mobile ad revenues.

Source: eMarketer

My view is that eMarketer may be underestimating mobile search revenues in this forecast. A year ago Google announced that mobile ad revenues were “on [an] annualized run rate of over $1 billion.” That number is almost certainly higher today and I would imagine that more than 50 percent of that revenue is being generated in North America.

Last October I a quick analysis of how that $1 billion might be allocated:

• AdMob: $200 million in topline (optimistic)
• Google mobile AdSense: $217.5 million
• Google mobile search: $507 million
• Android app revenues: $75 million (optimistic)

Again those numbers are going to be larger today. Google may be seeing closer to $700 million or more in mobile paid search on a global basis, half or more of which is coming from the US. That would mean Google alone is generating $350 million mobile paid search revenue.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes about the connections between digital and offline commerce. He previously held leadership roles at LSA, The Kelsey Group and TechTV. Follow him Twitter or find him on LinkedIn.