March 16, 2010, 12:00 AM

Planning a mobile ad campaign? Google says mobile search ads won’t be cheap

Following a fivefold increase in the number of Google searches conducted on mobile phones in the last two years, the leading search engine said this week that it expects mobile ad rates will surpass PC-based search ad rates.

Following a fivefold increase in the number of Google searches conducted on mobile phones in the last two years, the leading search engine said this week that it expects mobile ad rates will surpass PC-based search ad rates.

Speaking in a conference call with analysts Monday that was webcast on YouTube.com, Google Inc.’s engineering vice president Vic Gundotra noted that mobile search ad rates had grown “dramatically” in recent years and can be expected to continue growing until they surpass desktop search ads rates.

At the same time, Google plans to aggressively develop mobile applications to support online ads as well as more useful mobile search results. Complementary technology developments like GPS location, for example, are helping Google to develop more relevant mobile ads, Gundotra said.

For instance, Gundotra demonstrated during the webcast how consumers with GPS-capable mobile phones can touch a “Near Me Now” link on their phone screens, then touch a category like “Restaurants” to pull up a list of natural and paid-search listings featuring nearby eateries.

“Google has bet big on mobile,” he said.

Google made its mobile comments at a time when it is awaiting the outcome of a regulatory review of its plan to acquire AdMob, a mobile ad firm.

Kevin Lee, CEO of search marketing firm Didit, notes that mobile ad prices have been escalating as more online marketers experiment with them. Meantime, non-mobile paid search ads have stabilized in price, with only modest inflation, as advertisers have been able to better manage campaigns with more useful advertising metrics, he adds.

“Mobile search is up and coming,” says Matthew Mierzejewski, vice president of client services for search marketing firm The Rimm-Kaufman Group LLC. In the first quarter of this year, he says, mobile search impressions are on pace to grow 120% over the year-ago quarter, and click volume on those ads are on pace to rise 25%.

A recent report by Norway-based mobile technology company Opera Software ASA noted that Google dominates mobile web searches in the U.S. with a 9% share of all page views, compared to a combined total of 4.6% for competing search engines Yahoo and Microsoft Corp.’s Bing. Opera’s report came out in late February, around the same time Yahoo and Microsoft won final U.S. and European approvals to move ahead with their plan to make Bing the search engine for Yahoo sites.

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