A new report from Forrester Research projects US mobile paid search will be worth $3.8 billion by the end of 2013. Analyst forecasts are often aggressive, but this turns out to be a very reasonable estimate.
US mobile ad revenues were slightly below $3 billion according to the IAB for the first six months of 2013. That means, assuming higher mobile spending in the second half, mobile ad revenues should come in around $7 billion for the full year.
PC-based paid search was 43 percent of all digital ad revenue in 1H 2013. However paid search is a somewhat larger percentage of mobile ad revenue, up to between 50 and 60 percent (my estimate). Fifty five percent of $7 billion is $3.8 billion.
Forrester also projects that by the end of this year 72 percent of mobile subscribers will own smartphones. I suspect the number will actually be closer to 68 percent or 69 percent. Nielsen says that 64 percent of US mobile phone owners have smartphones today.
Source: Forrester Research (N = 61,167 in the US and N=5,800 in Canada; N = 22,027 in Europe)
Based on survey data Forrester found that 89 percent of US adults use mobile search engines at least weekly vs. 91 percent of tablet owners and 97 percent of PC users. Google has sponsored IPSOS research that shows even higher mobile search penetration. Yet those impressive “reach” or penetration numbers may conceal a more challenging “frequency problem” for Google and its rivals.
Earlier today I wrote on Marketing Land about survey data from financial industry research firm Consumer Intelligence Research Partners (CIRP). Those survey data showed Google’s search app was far less frequently used than a number of other apps, including Facebook, Twitter, Instagram, YouTube, Gmail and several others.
I don’t believe the CIRP numbers reflect usage of the search box in the mobile Safari browser on iOS. And they may not completely reflect Android search usage; people may not see “search” as a separate app on Android. But they do argue that while Google search has enormous reach it doesn’t (yet) have the frequency of PC-based search.
Data from our own recent Search Engine Land consumer survey (not yet published) reflect that a majority of people feel that mobile search is “harder” than on the PC. Still it is widely used. Perhaps if it were “easier” it would be more frequently utilized.
Google dominates mobile search in the US (89 percent) and globally (94 percent). Thus the overwhelming majority of the $3.8 billion in mobile paid search revenue Forrester projected will go into Mountain View’s pocket.
Source: StatCounter (12/13)
Others have estimated that mobile search revenues could reach 25 percent of all US paid search spending this year. That would put US mobile search revenues at more than $5 billion. That figure seems high given the current size of the overall mobile advertising market.