Over at SEW: Will Search Drive Mobile Ad Revenues?
My monthly Search Engine Watch column is up. It takes a closer look at our recent forecast and why search is the fastest growing revenue source among mobile ad formats. It has a lot to do with the increasingly vaunted position of the browser as a front door to mobile content (bear with me).
Last month, BIA/Kelsey released its annual mobile forecast. It projects mobile ad revenues in the U.S. to grow from $490 million in 2009 to $2.9 billion in 2014, a compound annual growth rate of 43 percent.
But more interesting than the total revenue pie is the breakdown of formats that drive this growth. SMS and display ads currently lead in revenue but are projected to be eclipsed by the faster moving mobile search ad category over the next five years.
So why is that? There are intricate formulas to devise these projections, unique to the way that each of these formats are bought and sold. Inputs include search volume, ad coverage, page views, CPCs, CPMs, etc.
Aggregate revenue for top mobile ad networks are also used to confirm figures. Along these lines, Google’s announced $2 billion global mobile run rate was affirming, given its estimated 60 percent share of the U.S. mobile ad market (including AdMob).
But looking back over why search ad revenue will accelerate so rapidly, a few interesting theories arise.