Google launched the Android mobile operating system last year to tap into the growing demand for smartphones and the applications that run on them. Now Google is launching a beta of its AdSense program for mobile applications.
Appropriately dubbed AdSense for Mobile Applications, the platform allows developers to earn revenue by displaying text and image ads on their iPhone and Android applications.
"Lower prices, faster network speeds, and unlimited data plans mean that people often reach for their cell phone rather than their computer when they are seeking information," said Susan Wojcicki, vice president of product management at Google. "As a result, mobile applications have become more and more popular, helping people find music, make restaurant reservations or check bank balances -- all on their phone."
Google Ready for Mobile Ad Growth
Wojcicki said Google launched AdSense for Mobile as a means of contributing to the growth of mobile applications. Google sees a strong, and growing, demand. On one hand, the company noted, advertisers are looking for ways to reach potential customers when they are engaged with mobile content. On the other hand, application developers are looking for ways to show the best ads to their users.
Google has been testing the service behind the scenes. Wojcicki said the company has already completed a successful trial of the new service with a small number of partners. She promised new features for mobile advertisers and publishers in upcoming releases.
Google may be moving in with this AdSense for Mobile now because the mobile market is defying current market trends. According to a Jupiter Research report entitled Mobile Advertising: Delivery Channels, Business Models & Forecasts, the mobile advertising market is expected to grow to $5.7 billion by 2014.
The Evolution of AdSense
Is AdSense for Mobile long overdue? Is it groundbreaking in the mobile advertising space? Greg Sterling, principal analyst at Sterling Market Intelligence, doesn't think either is the case. Instead, he sees it as an expansion of the private beta Google's Wojcicki mentioned.
"This puts Google in competition with other mobile ad networks, like AdMob, providing in-app advertising on the iPhone and Android devices. It provides Google's AdSense advertisers with reach into mobile -- though some may not be interested and most are not fully optimized to take advantage of mobile clicks. It also complements mobile PPC ads on the search side," Sterling said.
Although AdSense for Mobile is an important long-term move for Google and will make the mobile ad service market more competitive in the near term, Sterling doesn't expect it to become a major revenue stream for the company at this stage. Publishers and developers still need to apply and be approved for the expanded beta, he noted, and the apps market, as much attention as it gets, is still is a subset of a subset of mobile usage.
Jupiter analyst Windsor Holden cautions about putting too much stake in mobile advertising at this stage: "Regardless of mobile's advantages -- its personal nature, the facility for highly targeted advertising -- advertising will not commit more budget until they perceive that the audience for their advertisements has reached a critical mass."