Mobile search has moved from a dedicated box within the browsing experience, to a key exposer of services and applications to users, and delivery mechanism for marketing and advertising companies. But are the big three web players best positioned to deliver value to mobile operators, asks Keith Dyer
Annual revenues generated by mobile search services are expected to reach $4.8bn by 2013, according to a new report from Juniper Research.
The report says that while revenue generated by data charges associated with mobile search is significantly higher than that generated by mobile advertising at the present time, the gap will close over the next five years as the relatively young mobile advertising market establishes itself. It also finds that local search services will be the most popular with advertisers, attracting 40% of mobile search advertising spend over the 2008-2013 period.
According to the report, adoption of mobile search services is likely to be driven by factors such as:
Enhancements to the user interface resulting in an improved user experience while searching;
The gradual decline of the operator "walled garden" approach;
Reduction in data costs and increasing availability of flat rate data tariffs; and,
The impetus provided by major search brands such as Google and Yahoo!
However, the report cautioned that an "advertising overload" might act as a disincentive to consumers and might ultimately limit adoption, while there are continuing public concerns over search engine usage of personal data.
So how can the industry improve the search experience, whilst retaining public trust, and not annoy them with too many, irrelevant, ads?
One example might be new Google software for Nokia, BlackBerry and now also Windows Mobile phones, that makes searching 40% quicker, because it needs fewer clicks and there's no waiting for a browser to download the search engine's Web page, Google said.
Ease of use has become a mantra for the mobile phone sector as operators have realised that making services simpler to use will lead to increased use of mobile Internet in all shapes and forms. But it is also proving to be true in search, according to Google.
"Faster is proving to be much better on the mobile phone," says Anthony House, a Google spokesman. Then, Google's view is that as mobile search grows in popularity so will ad revenues. "We always say get the users first, then worry about the money," said House.
So if useability is key to opening up the ad revenues, it's notable that even on smartphones, come find keying in search queries painful. According to data from mobile search provider JumpTap, most users are entering no more than two words and the majority are entering a single word into the mobile search box. This is a major difference from the desktop/ PC experience, and indicates that search will not automatically become the main navigational tool on mobile, just because it has become so in the PC world.
But mobile will increase in importance over the next five years as a means to make more money from search, according to House. Google thinks there still is work to be done: the challenge is to put ads on the small screen in a way that doesn't annoy users, House said.
AOL Search's Farhan Memon showed a recent conference how the same content from AOLs Desktop search is integrated into mobile search. AOL's focus is on personalising the search experience based on the device browser as well as launching a client application and in the near future, SMS. Memon said that Windows Mobile users, for example, are often power-users, justifying a personalised experience. Memon highlighted some eMarketer research on what mobile users are looking for, including maps, directions, weather, local information, news, entertainment and so on. Unfortunately for those banking on local search, less than two percent of search results are currently localised. AOL currently categorises searches and comparing desktop with mobile searches by topic, and the themes generally overlap, but mobile topics are skewed younger (i.e. MySpace, MocoSpace, games, etc.). Research shows that AOLs Top Pick featuring mobile sites has generated significantly greater click-through. When comparing long-tail search terms between desktop and local, there is a direct correlation (virtually identical) yet mobile queries continue to increase in volume throughout the day, peaking at night and on holidays. In terms of how AOL is monetising mobile search, options range from sponsored links as well as advertorial and display. The big challenge in monetising mobile is working through the moving parts: device, category, advertiser and revenue model. Memon indicated that moving the search box up higher in the display increased queries 11 percent. Additionally, AOL offers a distributed bookmark from desktop request to SMS. In Memon's view, carriers will control less and less while users will get increasing levels of control of their mobile environment.
One provider that might disagree with that is JumpTap, which provides a white-label mobile search and advertising platform that launched with 10 carriers and now generates 12 million monthly queries a month. However, JumpTap's Matt Tengler did point out that once carriers opened up off-portal content, the search volume rapidly increased. Another boost for search was the accessibility and discoverability of the search tool within the mobile experience. Some of this is about WAP browsing versus client applications, with Tengler's view being that client apps are much richer and generate more user activity. He added that the search box is challenging to find on phones currently, but that will change in the future (via quick launch keys, embedded navigation and the idle screen). Despite these issues, Tengler thought that mobile is poised for rapid growth, with better phones, applications and content, easier plans, faster networks and accessible search boxes.
So what about the giants of the search world? Since introducing Yahoo! oneSearch in early 2007, Yahoo! has signed partnership agreements with more than 29 mobile operators covering more than 600 million mobile subscribers worldwide.
Marco Boerries, execute vice president, Connected Life, Yahoo, said, "When we created Yahoo! oneSearch, we had a belief that mobile search was not the same as PC search. A fundamentally different approach was required, one that included different usage models and results filtering. Most importantly, we believed there was no guarantee that success in PC search would automatically translate into similar success in mobile search, creating a real opportunity for those who innovate."
Recent strategic Yahoo! oneSearch partnerships include AT&T (United States), a global framework agreement with America Movil (16 countries across Latin America), a partnership with Rogers Wireless (Canada), partnerships with 16 operators (Asia Pacific Region), and an agreement with Telefonica (portals in 15 countries in Europe and Latin America). Yahoo!'s stated aim is to be either the exclusive or the preferred mobile search service on the carrier portal.
One exclusive deal Yahoo! has is its agreement to enter into a new strategic partnership with T-Mobile to bring Yahoo!'s mobile services to T-Mobile's European footprint. Yahoo! says this agreement "sets the stage" for Yahoo! oneSearch to become the exclusive mobile search service for T-Mobile customers beginning at the end of March, 2008. The deal is especially sweet for Yahoo!, as it replaced T-Mobile's former exlusive provider, Google, to win the deal.
"As a pioneer for the open mobile internet with web'n'walk, we give our customers instant and direct access to all available internet services, such as information, content, and communities," says Christopher Schloffer, Group Products & Innovation Officer, T-Mobile. "With Yahoo!, we combine our joint innovation power to bring the mobile Internet even closer to our customers. oneSearch, the best search product on the market, is a prime example here."
In terms of building on the search functionality, Yahoo! oneSearch has added Flight Tracker, movie reviews (critics and UGC), and movie trailers (select carriers/handsets), along with Yahoo! Answers and Wikipedia.
But it's not all about co-branding and exclusivc deals. JumpTap has signed a multinational deal with TeliaSonera, the leading mobile operator in the Nordic and Baltic regions. This strategic move will see JumpTap deploy a comprehensive search and advertising solution across seven different network operators in Sweden, Spain, Denmark, Finland, Norway, Estonia and Lithuania
JumpTap will be TeliaSonera's exclusive partner for all mobile advertising and paid search ads served on SurfPort, TeliaSonera's mobile Internet portal, and on SurfOpen, an Internet toolbar to be launched throughout the group during 2008, which follows the user both on and off portal.
Dan Olschwang, president and CEO of JumpTap, comments: "This is a monumental move for TeliaSonera and is testimony to the fact that the world's most innovative and progressive operators are deploying integrated white label search and mobile advertising services."
Crucially, JumpTap says its white label solution will enable TeliaSonera to secure a sustainable position in the mobile advertising value chain, a market expected to be worth over $14bn by 2011. It says TeliaSonera will capture long-term advertising revenue, along with subscriber loyalty, as the gateway to the mobile Internet.
SurfPort and SurfOpen will both incorporate JumpTap's built-for-mobile search and advertising solutions, with the aim being the creation of a richer, simpler mobile web experience for end-users, and encouraging repeat usage and increasde mobile web traffic.
"TeliaSonera will be able to leverage search intelligence to enable highly targeted advertising. JumpTap's fully integrated search and advertising solutions will use insight from search behaviour along with operator gateway data, to deliver the most targeted and tailored ad delivery system available on mobile, no matter where users navigate to on the mobile web," Olschwang says.
"SurfOpen is an important step into Mobile 2.0," says Indra Asander, Senior Vice President, Head of Content Services, Europe Mobility Services, at TeliaSonera. "SurfOpen will bring improved options to the market to communicate with our mobile customers in seven countries. Our partnership with JumpTap will help our customers quickly and easily access to their favorite content and services wherever it exists on the Internet."
Jumtap's Olschwang concludes: "The full potential of the mobile marketing industry is only realised when subscribers are satisfied with their mobile web experience. By combining intelligence from search with operator gateway data, users get fast access to everything they are searching for in the most intuitive way possible."
So the implication is clear, there are still useability issues around mobile search that have to be cleared up. The search tool needs to be moved up the navigation menu, or embedded as a personalised client application on the handset. Operators can either co-brand with one of the online giants, as T-Mobile is now trying for the second time, revenue sharing on ads served. Or they can adopt a targeted white label solution, tied into their own advertising solution. Ultimately, it will be up to the user to decide how they want to receive their information, and if every search request is met with a stream of adverts and sponsored links, then although the revenue opportunity might be attractive to mobile operators, they may just kill the opportunity off. Search with care.