Report: Mobile Apps Are Hot, But Mobile Search Drives The Most Revenue

New data from mobile research firm mobileSQUARED estimates 2010 will see roughly $800M spent on mobile advertising, rising to a healthy $5 billion over the next five years.

As the world’s second largest mobile-ad market — after Japan — the US has around 300 million mobile users.  Of which, some 49 million have engaged with some form of mobile advertising, the report found, with over a quarter of those users saying they’d actually “clicked on an ad and then went on to purchase an item.”

Looking through the mounds of data the report provides, the most interesting was in regards to revenue generation from mobile efforts.  While mobile apps continue to be the media darlings, recent findings indicate advertisers aren’t so keen to advertise within them.  The report found that apps attracted just 2% of mobile ad spend in the US, while search is the biggest draw overall with 46%, followed by display with 29%.  Marketers consistently rank mobile search advertising as the best way to drive results and revenue — even over display and in-app advertising.

Part of the reason behind it could be the growing complexity of the mobile advertising landscape in general — primarily with mobile ad networks.  An influx of networks have helped fuel the growth of the US mobile ad market, but with inventory available from upwards of 50 networks and 9,000 publishers, choosing the right mix of networks and ad networks has become a daunting task.  “Choosing the right ad network is a complicated decision, as publishers should consider fill rates, operating systems as well as response times of ad networks, to name a few criteria,” explained Nick Lane, chief analyst at mobileSQUARED and author of the report.

The mobile ad market is constantly evolving, but it continues to surprise me how everyone thinks it’s all about mobile apps.  While mobile apps do get the spotlight over other concepts, they’re not always the right solution for many brands.  The mobile channel may be one of the most successful marketing mediums around, but it takes dedicated research and analysis to determine what works and what doesn’t.