CEO Eric Schmidt said Google rakes in $1 billion a year in mobile advertising revenue, highlighting not only the company?s success in the space, but also the growth and validation of the industry as a whole.

There has been an ongoing war in mobile advertising between Google and Apple and iAd only heightened the tension. But with brands such as Adidas and Chanel backing out of iAd because of Apple?s supposed control issues, could it be that Google will end up the winner in the mobile advertising war?

?Google?s $1 billion means something significant,? said Neil Strother, Kirkland, WA-based mobile practice director of ABI Research. ?There is real money here and it is well beyond experimentation.

?It doesn?t mean that everyone will be a multibillion-dollar company,? he said. ?It should, however, be an eye-opener for brand advertisers and marketers. There is an audience to reach on mobile.

?Google and Apple will both be long-term players in mobile. On a pure-dollar basis, Google?s got a good shot for the top, but who knows.?

I can do anything better than you
Google?s Android platform is based on openness and is the operating system of choice for various manufacturers across the top four carriers in the United States. 

An Appcelerator study in collaboration with IDC found that while Apple leads in iPhone and iPad interest, developers favor Android in the long-term.

Seventy-two percent of developers said Android is best positioned to power a large number and variety of connected devices in the future, compared to 25 percent for iOS. As a result, 59 percent of developers now favor Android's long-term outlook versus 35 percent for iOS.

The fact that Google is making a lot of money from mobile advertising is no surprise.

Millennial Media reported that advertising on the Android platform continues to grow. 

Android, the second largest smartphone OS on Millennial?s network, increased 7 percent month-over-month to a 26 percent share of smartphone OS impressions.

Mobile advertising is growing at a fast rate and the creative possibilities are exciting. Since phones advance at lightning speed, new possibilities arise constantly.   

Borrell Associates forecasts that total mobile advertising spend is expected to reach $6.4 billion this year and $42.6 billion in 2015.

Research by IDC forecasts that Apple and Google will each have 21 percent mobile advertising market share by the end of the year.

That same study listed Microsoft with 7 percent, Yahoo with 9 percent and Nokia with 2 percent at the end of this year.

?I think for Apple this $1 billion is further reinforcement of the fact that Apple is in the right place,? Mr. Strother said. ?Google and Apple see the mobile advertising worlds differently.

?For Google it is about mobile search first and Apple is more focused on mobile display via iAd,? he said.

Google reported a 500 percent growth in mobile search over the last two years. The company saw a 400 percent increase in mobile search conducted on smartphones in the last year.

App-dom
Apple?s iPhone was the first phone that made people say, ?wow.? As the first truly enjoyable experience on mobile, the iPhone has many aficionados.

With the iPad came the features and functionality of the iPhone with a 10-inch display, a canvas for the creative teams in the mobile advertising space.

A lot of what is possible in mobile would not be possible without the iPhone, the iPad and Apple.

Apple?s launch of the iPhone accelerated the rise of the smartphone generation. Apple forced every manufacturer to step up their game. It drove innovation and maturation in the industry.

The Apple App Store has more than 250,000 applications for the iPhone. Almost all retail giants and big brands have an iPhone application or marry their content into a third-party app.

Borrell Associates forecasts that spending for ads delivered via mobile applications in the United States will explode from $310 million this year to $8.4 billion by 2015.

Comparatively speaking, ads delivered via a mobile browser are expected to reach $3.4 billion by year-end and are projected to reach $10.9 billion in 2015.

?Apple?s iAd focuses on display advertising and brings an interactive, visual experience to display mobile advertising,? Mr. Strother said. ?But again, Google is more about search than display on mobile.

?I think both companies will be winners in their own way,? he said.

IAd expensive, but brands bend
Apple?s iAd charged launch advertisers $10 million and now demands a $1 million minimum to advertise. And as expensive as that sounds, brands are doing it.

Nissan Motor Co. Ltd. is one of the iAd launch sponsors, with campaigns geared to drive awareness of its new automotive models among Apple?s desirable demographics.

The iAd campaign promoting the Nissan LEAF, which will be the first 100 percent electric car available in the United States, rolled out in early July with the launch of Apple?s iAd platform (see story).

The automaker?s initial push with the iAd Network will run through March 2011.

Consumer packaged goods giant Unilever is also running an iAd campaign. The company is promoting multiple brands.

The Family Dish iAd campaign is a program created by Unilever to inspire moms to increase quality time with their family by getting them into the kitchen cooking together (see story).

One aspect of JCPenney?s ?New Look. New Year. Who Knew!? multichannel back-to-school campaign featured ads that ran via Apple?s iAd. The ad featured a Style Mixer interactive experience, letting users scrolls and mix-and-match outfit combinations.

?The main thing here is that mobile advertising is coming out of its early stages and steadily maturing,? Mr. Strother said. ?The growth is not explosive but it is getting there.

?People will continue to access media and content from their mobile devices whether via apps for the browser and mobile advertising will continue to grow because of that,? he said. ?Advertisers follow consumers and consumers are mobile.

?As smartphones get better and better the opportunities in terms of what is possible will be much more sophisticated.?

Final take
Giselle Tsirulnik is senior editor of Mobile Marketer
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