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While mobile is presenting some tough monetization challenges for companies like Facebook, it's increasingly looking like a boon to others.

Google, for instance, is seeing spending on mobile search ads skyrocket, and it's working hard to improve its mobile ad offerings. In many cases, its efforts appear to be showing signs of success.

And things are only going to get better according to a new report published by analyst firm Juniper Research. According to Juniper, by 2017, mobile search and discovery, which Juniper considers to include ads in the paid search, local search, augmented reality and discovery app categories, will be a $15bn per year business.

It's not difficult to understand why: the 'targetability' of some of these ads is considered to be very high, and high CPC rates coupled with high CTRs is causing advertisers to spend more on them, producing, of course, more revenue for companies like Google.

But the Googles of the world may not have the greatest opportunities as Juniper sees it. Daniel Ashdown, the author of Juniper's report, noted:

Web search results, by their very nature, are more generalised, despite the local parameters search engines offer. Furthermore, the websites linked-to in search results are often not optimised for mobile devices.

Because of this, local search apps, like those offered by companies such as Yelp and Qype, may have an easier time cashing in as they can lead their users "through the whole process, to reaching a purchasing decision."

The biggest challenge in capturing a piece of this multi-billion dollar pie, Juniper says, will be differentiation. Players like Google, because of their market positions, will do very well because they capture so many mobile searches. Those that can offer better experiences and targeting will need to differentiate themselves to stand out.

Patricio Robles

Published 18 July, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (1)

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Dev Bhatia

Great article. Ultimately, Google search is cheap compared to traditional channels for new customer acquisition. Compare mobile search on Google with ads in the Yellow Pages, or in Val-Pak, which are other channels that deliver local calls from customers searching for their services. At mTrax (http://mtrax.com) we set up exclusively click-to-call mobile ads on the major search engines. This resolves the issue raised by Mr. Ashdown. Yes, there are sites which don't show well in mobile. But click-to-call ads skip over the website altogether, and deliver exactly what the small business wants: calls from local prospects searching for their services.

about 4 years ago

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