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Google on track to rake in $2.5B from mobile ads

Google?s expects to bring in $2.5 billion from mobile advertising over the next year, driven by bigger and more frequent mobile search campaigns.

Google said last week that mobile is helping drive up its revenue, with growth accelerating and driven primarily by mobile search. The company reported a 33 percent increase in revenues for a total of $9.72 billion for the quarter ended Sept. 30.

?We're also seeing a huge positive revenue impact from mobile, which has grown 2.5 times in the last 12 months to a run rate of over $2.5 billion,? said Larry Page, CEO of Google during a conference call with analysts to discuss the results.

Mobile ad spend grows
Google, Mountain View, CA, also said that aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of AdSense partners, increased approximately 28 percent over the third quarter last year and increased approximately 13 percent from this year?s second quarter.

Google executives reported that advertisers have significantly increased the size and frequency of their mobile campaigns.

?Mobile is becoming a must have,? said Nikesh Arora, chief business officer and senior vice president of Google, during the conference call.

?This includes clients like InterContinental Hotels Group, which spans pretty much across our entire portfolio of properties,? he said.

In addition to mobile search, the growth in revenue from mobile is also being driven by the expansion of Android devices and tablets.

The company reported there are now more than 190 million Android mobile devices activated.

Executives said that they see a lot of opportunities to continue to grow mobile as the experience on devices improves.

A new report from Marin Software supports Google?s assertion that advertisers are increasing how much they spend on search. Marin estimates that 7 percent of the overall budget for search is going to mobile for many large advertisers.

?What?s interesting about that finding is that 7 percent is less than the overall query volume on mobile,? said Matt Lawson, vice president of marketing at Marin Software, San Francisco. ?Any time you see advertising investment lag user adoption, it usually means there is a good opportunity for advertisers.?

Google, in particular, is increasingly making it easier for advertisers to tie together local and mobile with the ability to click-to-call and ad location extensions within ads and seeing higher click-through rates.

The growing importance of mobile search means several things for advertisers.

?They need to treat mobile as separate and break out campaigns into separate desktop and mobile campaigns,? Mr. Lawson said.

?They also need to think about device strategy ? how do they target users on specific devices to increase relevancy,? he said.

?We think a there is great opportunity here going into the holiday season for advertisers who are looking to ramp up their sales ? mobile and particularly tablets look very promising.?

Last week, Google also addressed the growing number of lawsuits in the mobile space, including several directed at Android devices.

?Obviously, we announced our intention around Motorola, and we're serious about protecting the Android ecosystem, making sure that that continues to be incredibly successful,? Mr. Page said. ?But we feel good about our efforts there.

?We see Android growing gangbusters, and we don't see anything that's going to stop that,? he said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York