We’ve seen two quarters of declines in online advertising revenues, but signs of a recovery, or at least a reset, are beginning to show. In a note today explaining why he is bullish on Google, Citi Internet analyst Mark Mahaney makes the case for cautious optimism.
He predicts stability in search advertising revenues, a significant increase in spending by retail advertisers in both search and display ads, and major growth in mobile ad revenues. While it is “too early to call the quarter,” his checks with search engine marketing firms suggest that overall spending and cost-per-clicks will at least be in line with the second quarter.
On top of that pillar, there is the “snowballing momentum” for mobile search ads. He writes:
Advertisers are seeing 10X increase in click-thrus via Mobile devices. Mobile Search activity is ramping fast this Smartphone Summer, and ad dollars are following.
That is off a small base, but growth is always good. With all of the new Web phones from the iPhone and Android to the Palm Pre and Blackberry, the Summer of Smartphone Love seems to be paying off.
Finally, Mahaney sees movement in spending budgets among ecommerce companies. In contrast to 3 percent annual growth in marketing spends among these retailers in the first half of the year, he expects them to ramp up online advertising spending by 20 percent in the second half of the year as they gear up for the holiday season.
But will growth in mobile and retail be enough to move the needle for the entire industry?
Will The Online Advertising Recovery Be Led By Retail And Mobile?
I hope not. I need traditional advertising like I need a blacksmith for my car or a COBOL programmer for my laptop. On my cel phone I like advertising even less.
I can see retail eventually reco, but what is genesis for mobile making a big move?
If is because they can, the model may not be sustainable, because nothing stays new forever.
On the other hand, it could evolve into something substantial as technology improves.
The technology already exists for making purchases from your smartphone.
Mobile opt-in rates are high because people are near their phones 18+ hours a day, unlike computers or any other medium. Mobile users also have a personal relationship with their devices.
Finally, the latest studies show that people are talking less and using the data functions on their mobile phones more.
I doubt it.
Mobile advertising is still a very small market (relative to web) at around $300M (?) for 2009 …
a large percentage of those clicks via mobile devices are mistakes…
small screen + big thumbs = false ad clicks.
But the market would take care of this.
If the clicks are less relevant than the costs should in theory depreciate.
While some clicks are mistakes, the average conversion rate on mobile phone ads is three+ times higher than with traditional Internet search advertising. True, most of the products purchased are low revenue–ring tones, for example. But as smartphones become more prevalent and mobile over PC use increases, the ASP (average sales price) of products advertised on mobile websites will rise.
I think retailers are going to increase spend by the same amount they do every year during the monthly leading up to the holidays. So yes, quarter-over-quarter it may appear that there is growth, but that doesn’t mean year over year growth will be as high. I’m expecting an increase, but I’m not as optimistic that this increase in spending warrants suggesting the whole online advertising market is turning around.
less than 4 years we will see a free ad supported mobile phone. watch an ad = make a call.
i would rather do a search on mobile device when next to my homepc so i can have the data cached and easily retrieved when in the field. data portability and access makes your mobile device the most powerful weapon in any consumers digital arsenal.
“locator” terminology will replace “search” for mobile location based content discovery.
True and voice technology, such as Google voice, will enhance the mobile user’s experience through simpler data entry. Say “bank” and location-equipped mobile phones will find the nearest bank.
My dream is a mobile phone totally controlled by voice. If that happens, then “voice” takes on a whole new meaning. No longer do you only talk to humans; you’re talking to a mobile device.
I think over the coming 12-24 months big time.
What are people’s thoughts on Bluetooth advertising to mobiles? There are a few companies in Europe in the space, and i’ve received a couple of messages in NY too.. who are the players?
Numerous players have moved into bluetooth “proximity advertising.” However, most experts in the mobile ad industry tell me this form of mobile advertising, using text messages and coupons, will produce not produce positive outcomes. Can you imagine walking down a mall with text messages appearing on your handset every time you’re within 30 feet of a retailer?
where is the original article? link please!
I’d like to check more facts the conclusion based.
Did you ever find the original article? I’m looking for it too.
Also interested in this article if anyone can dig it up. Or any other articles pointing to mobile ad/smart phone growth in the last year.
SmartPhones have a lot of contextual information about the user like the location, daily routine, user profile (based on the kind of apps used) etc. Would be interesting to see how the ad industry makes use of this data!
Eg. If there is a McDonalds on my way to work, and the phone knows its 8.30 am and am going to work, can it show me a new deal ad?
Srikanth
http://www.arktan.com
We are seeing mobile spend ramp firsthand at MocoSpace. I expect that as retailers like Sears grow their online and mobile properties, we will see the ad $$ follow.
Justin
MocoSpace.com
Online advertisements are the next gen advertisements
I think it’s very possible. Affiliate programs are booming, which increases the revenues for large retail companies. I don’t know if it will increase revenues across the board, but it will certainly be interesting to watch.
I can’t speak for mobile, since my traffic is pretty conventional. But my ads rates have been rebounding for months now.