• by Laurie Sullivan  @lauriesullivan, January 22, 2010

Google's plan to dominate advertising on mobile phones relies on pushing Android running devices into the marketplace to build an ecosystem of developers who support its platforms. That's the message Google executives sent analysts during its fourth-quarter earnings call.

The strategy will put inventory information from retail stores in mobile ads and search results. Mobile applications fueled by GPS and location-based services will spur growth in the ad market. Recently, Google began inserting phone numbers and coupons in mobile ads, which consumers tend to click on more frequently. There are some examples where advertisers such as AT&T use some of Google's products to help people find local stores. Google Chief Executive Officer Eric Schmidt told analysts that mobile search traffic growth continues to rise much faster than on the PC.

Google's mobile search traffic has increased dramatically in the past two years, attributed to sales of devices running Android. The Motorola Droid has had success since launching last fall, supported by Verizon Wireless. Now the company has a direct sales model through a Web site set up to sell the Nexus One mobile phone. Through that portal, consumers can expect to find other devices in the future.

New targeting tools and formats are also making a huge difference, according to Jonathan Rosenberg, Google senior vice president of product management. "I mentioned click-to-call, putting phone numbers in mobile ads making a difference," he says. "Try something like auto insurance and you'll see the Progressive ad on the phone shows the number, while on the PC it doesn't."

Google also lets advertisers target high-end and specific devices, as well as providing analytics data to support the campaigns.

Local has become a focus for Google, but in mobile that push stretches to national, too. During the earnings call, Google Chief Financial Officer Patrick Pichette refers to mobile as a "mosaic" of opportunities, and local remains one of them.

Built on accelerating the development of an ecosystem, Google's mobile strategy supported by open-source technology will let developers create products at a much lower cost. These low-cost apps allow more consumers to afford them. Google's internal research suggests that people who have Android devices use their phone 30 times more.

Analysts also wanted to know why Google didn't launch a traditional marketing campaign for Nexus One after unveiling the phone earlier this year. The push to create a new online sales model through a Google-dedicated store that uses Google Checkout didn't need a campaign because the company received extensive marketing through the media. The first group targeted became Google "aficionados."