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Apple beware: Google will rule the mobile industry in 2011, claims IDC

Google dominates mobile advertising, with a market share of 59 percent of total spending including search and display advertising, followed by Apple with 8.4 percent and Millennial Media at 6.8 percent, according to IDC.

When it comes to mobile Internet display ads, Google is tied at first place with Apple with 19 percent market share and independent ad network Millennial Media comes in second place with about 15 percent. Google dominates mobile search advertising, with an ad revenue market share of 91.4 percent.

?The key finding is that the market grew very fast this year, by about 146 percent, which was much faster than we thought and we also think that next year we will see almost $2 billion for mobile online advertising,? said Karsten Weide, research vice president of digital media and entertainment at IDC, Framingham, MA.  

?The second key finding is the majority of that spend will be search advertising,? he said. ?Display was bigger than search and we find that now this is not true anymore. In mobile display, the market is more fragmented.

?A lot of mobile Internet traffic comes from peole looking for stuff on the go so we expect mobile search to grow. We believe the one company that is going to do well because of that is Google. We also believe that Google is going to outgrow Apple in mobile display market share.?

Google to beat Apple?
Mr. Weide said that he expects more Android devices will be sold than Apple devices in years to come.

More mobile devices mean more market share. More market share means more inventory for ads. More inventory means more impressions, which means more revenue.

Google will outgrow Apple in mobile display advertising, Mr. Weide said.

Total U.S. mobile online ad spending for 2010, including search and display advertising, will be an estimated $877.2 million, up 138.3 percent from the $368 million spent in 2009, according to IDC.

Implications to brands and marketers
For brands and marketers that are looking into engaging in mobile search advertising, Google is the company to go with. 

?You probably want to go with Google and not the smaller players like Microsoft and Yahoo because they don?t have the required traffic volume for a successful search campaign,? Mr. Weide said.

?In display, if you are a marketer you want to go to someone that has access to all the major networks,? he said.

Mr. Weide said companies should go with Google rather than Apple when it comes to mobile display advertising.

Google?s AdMob runs ads on both iPhone and Android devices, ensuring reach and impressions.
For marketers that go with Apple, all they get is Apple and neglect the other half of the market. 

2011 growth
Whether it?s Google or Apple, one thing is for sure. Mobile advertising is growing by leaps and bounds.

This year mobile advertising was about 3 percent of marketers? total online advertising budgets, per IDC. In 2011, this number is expected to grow to 5 percent.

The reason for the growth is advertisers are following eyeballs. There is a lot of activity on the mobile Web and advertisers finally understand that it is an effective marketing channel.

Additionally, the mobile phone is a personal device. It enables in-your-face advertising. The ads are more personal than on the PC.

Another reason for the expected growth in mobile advertising budgets in 2011 is for marketers it is about the results and the effectiveness of a channel. Mobile is starting to make a name for itself with ads that see grand results.

?Marketers love the new, cool and sexy stuff and they want to ride the cool wave,? Mr. Weide said. The final reason why mobile budgets will increase is they do realize that mobile advertising will be big.

?We expect there will be more mobile Internet traffic than the desktop, meaning mobile display and mobile search will outgrow their PC counterparts,? he said. ?I am very skeptical about rich media though because the phone screens already are so congested.

?Video will be big, but I don?t see other rich media being big because already AT&T has pulled the plug on unlimited data plans. I expect other carriers will follow and when they do, it will become very tricky to use apps and rely on a lot of data. Location-based advertising will be most successful.?

Final take
Both Apple and Google's platforms foster innovation, but in a different way. Here is Bloomberg's take on the Google-Apple feud, following Eric Schmidt's resignation from the Apple board.