Google Still Dominant In Mobile Search Despite Yahoo-Microsoft Distribution Deals

A consumer survey released this morning by Bernstein analyst Jeffrey Lindsay affirms our belief that mobile advertising is a smaller near-term opportunity than most people think.  It also suggests that Google will continue to dominate mobile search the way it does PC-based search.

Lindsay surveyed 360 smartphone users about their surfing preferences.  The following jumped out:

  • Users are seeing more mobile ads, but the numbers are still modest (Lindsay estimates mobile will represent only 7% of total online ad spend by 2012).
  • Consumers appear more receptive to search ads versus display ads
  • Despite mobile distribution deals by competitors, Google is the search provider of choice on smartphones.

SEARCH IS EMERGING AS A BIGGER MOBILE OPPORTUNITY THAN DISPLAY

69% of respondents said smartphones had caused them to perform more search queries, while only 58% viewed more web pages.

This suggests smartphones will have a bigger impact on web searches than web browsing, which presents a greater opportunity for paid search advertising than display advertising.  Shorter browsing sessions and limited format opportunities will also likely lead to inferior click-through rates for mobile display ads versus PC display ads, weighing on mobile display ad growth.

Smartphone Web Searches

GOOGLE DOMINATES MOBILE SEARCHES TOO

There is currently a land grab among the also-ran search companies to capture the mobile search opportunity by cutting deals with carriers to become the default search provider on smartphones (Yahoo cut deals with ATT and T-Mobile, Microsoft with Verizon). 

However, it appears users remain loyal to the search providers they use on PCs–namely Google.  Market share among Lindsay’s respondents indicated almost identical percentages for the major search providers on PCs and smartphones despite preferred distribution deals.

Mobile search Mkt Share

This is important because all of the major search companies (AOL, Google, Microsoft, Yahoo) have indicated mobile is a big priority, but distribution deals appear unable to provide a competitive edge.  Google appears on its way to dominating mobile search in addition to PC search.

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