When Vodafone signed a deal with Google to develop a mobile search service in February it seemed that everything was falling into place, and that the mobile Web would be dominated by Google and other large search engines.
But since then there has been persistent speculation that some of the network operators aren’t happy with the big search engines. Smaller search rivals have been sensing an opportunity to dent Google’s position, in a way that no company could hope to do on the Web. They feel that companies would welcome the chance to make sure that Google doesn’t become a quasi-monopoly on mobile as it has on the internet.
Their opportunity is slim. Eric McCabe, vice president of marketing at one such company, Jumptap, thinks that all the mobile operators will have deals in place by next year. To date Jumptap has signed up to provide search services with two operators in North America, with three more in the pipeline, but it is also now pushing for deals in the UK market.
With more people using mobile phones than PCs, and mobile internet access climbing, the stakes are high. Research company Informa Telecoms & Media predicts that mobile advertising spend will more than double over the next year to over $1.5bn (800m). Within five years over $11.35bn (6bn) will be spent on advertising on mobile channels, and there will be close to 4 billion mobile subscribers.
Others are even more bullish. BKI Media, an independent analyst house, predicts that mobile search alone will be worth $13bn (6.9bn) in 2011 and become the biggest driver of the mobile internet in the process. Mobile operators who don’t plan their mobile search strategies carefully could lose out on revenues it says.
So can the online search giants repeat their dominance in the mobile field? Dennis Woodside, Google’s newly-installed managing director for the UK, Ireland and Benelux, is confident. "We see our traffic from mobile increasing more and more. It seems like a no-brainer to me, but the technology has to be there."
Yahoo! has also been signing deals to increase its mobile search traffic too. Most recently it signed a deal to deliver search marketing products with Bango, which runs a network of thousands of mobile sites for clients such as The Sun and EMI. The companies intend to deploy the service worldwide from next month.
However, some industry observers think that search won’t be as important in the mobile world as it is on the internet. The restrictions of a small screen mean that the number of sponsored links can’t be as numerous as on a web page, and there is likely to be a smaller range of things that people will want to search for while on the move.
Nicky Walton, senior research analyst at Informa and author of a recent report looking at mobile advertising between now and 2011, says: "Towards the end of the period mobile television is going to attract most of the advertising revenue, whereas now it is SMS," she says.
However, Jumptap’s McCabe thinks that mobile has some unique properties which the search market can exploit. They include the ability for consumers to quickly contact advertisers by hitting the call button on their phone when they see a message of interest. "There are big opportunities in the pay-per-call space. That’s going to be one of the main differences, because of that it will be more valuable to advertisers."
Brands such as Coca-Cola and Peugeot have already been involved in mobile advertising for several years, attracted by the chance of marketing to people when they’re most able to act on a message. With mobile connections passing the 2.5 billion mark in the past month, and content becoming ever more sophisticated, more are likely to follow. The ability for, say, a pizza chain, to get in front of consumers just as they are looking for a bite to eat should prove compelling.
The same argument about getting a brand in front of consumers when they’re actively looking for something is what attracted so many advertisers to search marketing on the internet before now. As a result of their success Google, Yahoo! and MSN have established relationships with many of those advertisers and their agencies – something that could make life difficult for the independent mobile search companies vying for deals with the operators.
But, more than anything else, Google rose to its current dominant position because it offered the most user-friendly and effective tool in the eyes of most consumers. If it can repeat that on mobile then it could dominate a whole new area of search.