I wrote a while back on how some analysts and industry-aware execs are questioning the immense growth projections that always seem to be surrounding mobile marketing and the various opportunities it will present in the near future. Primarily, some growth estimates have been significantly scaled back to more realistic proportions.
In addition to this more realistic outlook on where the mobile marketing industry is actually going, some new insight suggests that not only is the industry not growing as fast as almost everyone predicted, but that mobile marketing is shaping up to be all search.
The Kelsey Group, while still making over-enthusiastic projections regarding the mobile market, suggests that the mobile advertising market will balloon from $160 million in 2008 to $3.1 billion in 2013. While this may sound like just another un-founded projection, the Kelsey Group goes on to suggest that mobile search will go from 24 percent of the total mobile ad market last year to 73 percent of the much larger pie in 2013- meaning other forms of mobile marketing such as SMS and display advertising is set to decline over the same time period.
Is this realistic? I think so. Display ads are projected to go from 13 percent of the total to 18 percent, while SMS ads will decline as a percentage from 63 percent to 9 percent. While I agree SMS will go down slightly, I don’t think it will take such as sharp decline so quickly- there will always be a place for SMS in mobile advertising.
I think TechCrunch summarizes it the best: “display ads take up precious real estate on your phone screen and tend to just get in the way and be an annoyance. That’s why most people don’t like them. But when you are doing a search on your phone, you are often looking for something nearby—a store, a restaurant, a dry cleaner. You are more open to ads, especially if they are relevant to your search.”
There’s a reason the big players, especially Google and Yahoo, are preparing themselves for mobile in big ways. If mobile search is projected to balloon to 73% of a $3.1 billion market, you better believe Google and Yahoo will have their hands in it. As Mark Mahaney, a Citi analyst with similar views to that of the Kelsey Group states, “given the nature of mobile devices, local queries on mobile should, over time, be greater than local queries on the desktop.” Could mobile search, one day, be more profitable than desktop search? Absolutely.