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July 10, 2007

Mobile Search – The Next Big Thing?

Annual mobile phone sales are predicted to hit 1 billion by 2009 and there are already 4 times as many internet-enabled phones in the world than there are PC’s.

According to Dotmobi (www.dotmobi.net), one third of the global population are connected via mobile phones today and approximately half are expected to be using a mobile Internet phone by 2008. An IPSOS survey suggests that 29% of mobile phone users in the UK searched for news and information on their handset during 2005.

The statistics are impressive and will get any marketers pulse racing. But it does seem as if we’ve been hearing about the potential of mobile search market for some time, and yet very few travel companies appear to be active in the mobile search space and mobile e-commerce revenues are still modest.

Up until now most advertisers have been ignoring mobile as a marketing channel, according to a new report by Forrester Research called “Interactive Marketing Channels to Watch in 2007.” It suggests that only 13 percent of marketers use mobile text message ads and only 11 percent bother advertising on wireless application protocol (WAP) sites. It seems clear that advertisers are waiting for evidence that the market is there before deciding to jump in themselves.

Barrier and limitations to growth

Despite the huge number of people that have access to the mobile internet there are a number of barriers to mobile web adoption. For example;

1. Cost and clarity – carrier data plans can be expensive and confusing compared to normal internet access plans.

2. Screen Size – the limited screen size of many hand sets negatively impacts the user’s browsing experience.

3. Ease of use – due to the limited screen size there is an increased number of clicks needed to get to content.

4. Lack of content – there is a ‘walled garden’ approach to the content offered by many mobile network operators which means that not all mobile users get full access to content.

Competition – the WiFi explosion

Another factor that may have impacted on the growth of mobile internet usage is the increasing availability of high-speed WiFi internet access in many public areas. Airports, hotels, bars, libraries and commercial shopping centres are increasingly offering WiFi, and it’s often free. This has encouraged users to use laptops and PDA’s to access the internet while on the move rather than through mobile phones.

Mobile is the perfect advertising platform

Despite these barriers to growth travel companies cannot afford to ignore the e-commerce and marketing potential of this platform. All of the barriers to growth outlined above will be overcome over time as technology improves and network and content providers adapt their services to facilitate the growth. The issue is not really whether the mobile search market will make an impact, but how it will make an impact.

In many ways mobile is the perfect advertising platform. It’s always with the consumer, it’s always on, it provides personal profiling data, it provides location data, it’s interactive and it has multiple billing options already built in.

At present the major bulk of mobile searches are related to ring tones, news, entertainment, maps and directions, directory listings, local restaurants and other local services. As many as 60,000 UK users a day are checking train times on their mobile phones.

Local search is clearly the natural mobile advertising opportunity. Going forward, more complex searches and bigger transactions will become viable as technology advances and users become more comfortable with using their handsets for searching.

In a recent Travelmole interview, Nancy Lyndhurst, the product manager for O2, said some of the larger travel brands like Cathay Pacific, Accor Hotels and KLM are already successfully marketing with mobile technology. She also cites the example of Lastminute who received a £3,000 holiday booking online from a customer using their mobile telephone.

Mobile marketing spend to reach $11 billion by 2011

A recent report by the telecom division of Informa Group stated that advertisers are expected to spend a massive $11 billion on mobile marketing by 2011. Optimistic predictions like this have compelled the major search engines to start making significant investment in the future of mobile search themselves.

Google have predicted that their own mobile division, based in London, will “become the biggest driver of new business” for the company.

Google has developed its own mobile search engine and has signed a number of deals to provide mobile search services to major operator portals. Motorola have even agreed to add a dedicated “Google” button to some of its hand sets. LG, one of the top 5 mobile firms in the world, have announced that they will start to ship handsets pre-loaded with Google services from this month.

Yahoo has unveiled a new application called Yahoo Go Mobile which makes its various services available on certain phones. Not to be outdone, Microsoft launched Live Search for Mobile in February at the 3GSM World Congress in Barcelona.

There are also a number of start ups like Jumptap and Medio who will be bringing services to the new mobile search space.

It’s clear that the major search properties, in partnership with the phone manufacturers and network services, are intent on driving the mobile search sector forward. With this kind of momentum there’s no doubt that mobile search marketing will eventually become a major part of online marketing, it’s just a question of when. Could 2007 be the year of mobile search?

Author:  Mark Scriven is the M.D of Turismotec Ltd, a UK based search marketing agency that specialises in the travel sector. Turismotec publish a bi-monthly search marketing newsletter called etravel.success.

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