GOOGLE MOBILE: There have been reams written about Google’s 10 year mobile ad revenue goal and their mobile strategy – but here’s an article from AFX that connects the dots, allowing us in confidence to conclude Google’s goals are pipedreams (or as we say in the U.K. “a load of old bollocks”).

Kenneth Dulaney, VP of research firm Gartner Group, puts in a slightly more eloquent way, “I’d say it’s difficult to get half of Google’s revenue from mobile advertising. Google doesn’t understand yet how to build mobile applications, so there is potential for early failure because they don’t have the right application. What Google’s got to understand is that people don’t want to navigate on the phone.”

To add to the drama is a raft of stats about mobile search and advertising in one place, suggesting that growth in this sector may be much slower than many have predicted.

· More than one-half of mobile phone owners said that nothing would motivate them to use Web-based services on their mobiles

· Only 3 percent of mobile users use mobile search

· Only 10 percent of teens access the Web via their mobiles

· In the U.S., 16 percent of cell phone owners regularly access the Internet from their mobiles, increasing to 28 percent in 2012 (Jupiter Research)

And some quotes from Greg Sterling of Sterling Market Intelligence dovetail well with my view that the Google goal is over-hyped: “There are a lot of variables here. It’s often that people come out with aggressive forecasts, they wind up coming true, but takes longer. For the Internet, people were forecasting things that are coming true today but were forecast for five or six years ago.”

Sterling’s forecast that mobile advertising revenues will reach $5.08 billion in North America and Western Europe by 2012 seems conservative, but there is an air of realism in his forecast when compared with the average forecast of analysts polled by Thomson Financial, placing Google’s 2009 mobile ad revenue at $21.31 billion.

There’s no denying that there is a big market for highly personalised, contextual mobile advertising that the user can control, but overblown predictions do nothing other than inflate the mobile Internet bubble to bursting point – how quickly we forget…

MOBILE INTERNET SURFING: Children are getting mobile phones at a younger age and are using them more frequently to surf the Internet. According to a study from Telenor (based on interviews with 600 parents with children aged 5-17 years, in total 1036 children), more than a quarter of 14 year olds are using their mobile phones to surf the internet.

This makes interesting reading alongside the findings that mobile internet usage increases with age and that 88 percent of 10 year olds now own a mobile phone. There is clearly a market here and the indication that tomorrow’s surfers will be as used to using a mobile device as a computer. But operators will need to tread carefully and ensure children get protection from adult content or risk losing subscribers to voice and text only tariffs

MOBILE SEARCH AND SOCIAL NETWORKING: The future for SMS traffic growth is in mobile social networking and mobile search according to a new report from Gartner. The research firm is predicting that 2.3 trillion messages will be sent in 2008, an increase of 19.6 percent from 2007, but increased competition and message bundling is leading to a squeeze on messaging margins – messaging revenues will grow just 15.7 percent in the same period to USD60.2 billion. Key figures from different markets include:

· Asia Pacific sent 1.5 trillion messages in 2007, forecast to grow to 1.7 trillion in 2008

· North America sent 189 billion messages in 2007, forecast to grow to 301 billion in 2008

· Western Europe sent 202 billion messages in 2007, forecast to grow to 215 billion in 2008

Despite continued growth in messaging volume, the rate of growth is slowing. And Gartner are forecasting particularly slow growth in the picture messaging market due to changes in user behaviour. With users now sharing most of their photos on social networking sites, the future looks uncertain for P2P picture messaging. However, operators should learn lessons from the partnerships they have struck with IM providers delivering steady growth in mobile IM volumes and develop partnerships with social networking sites to drive the next wave of messaging revenues.

Mobile search and advertising are drivers for messaging growth. However, Nick Ingelbrecht, research director for Gartner, has a cautionary note for operators. “Mobile search and advertising also offer attractive potential drivers for SMS traffic, although most carriers appear poorly placed to support the end-to-end campaign management and reporting requirements of media buyers and advertisers.”

The takeaway: Whoever gets personalised and contextual mobile search advertising right will drive this market forwards.

MOBILE ADVERTISING: According to ABI Research, Japan’s mobile advertising revenue will grow to USD$1.2 billion and South Korea will cash in at USD$684 million by the year 2012. Andy Bae, Senior analyst of ABI Research thinks that the operators in this region have got the value chain right, “Japan and South Korea have almost the same market structures, value chains, and service applications. This is because mobile operators in both countries established their own mobile ad agencies to support operators’ business models for mobile ads. The relationships between operators and the affiliated mobile ads firms are close, in order to produce desirable business results.”

This entry was posted on Thursday, December 20th, 2007 at 4:20 pm and is filed under Mobile Advertising, Mobile Search, Mobile Social Networking, Web 2.0. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.