• by Tameka Kee , September 14, 2007

Google was not the only company making mobile news this week, but the extension of its AdWords ads to the mobile platform--because it's Google--made even the most skeptical finance types concede that 2007 may well be the year that mobile advertising officially "popped."

The search giant "is acting fast to take control of the mobile search ad market--a crucial move if it expands as predicted," said Silicon Alley Insider's Dan Frommer. And with The Kelsey Group predicting mobile search to generate more than $1.4 billion in ad revenue by 2012, Google is trying to get a jump on what right now is anyone's game.

Google had been testing mobile text ads since last year, but decided to expand the effort--informing all AdWords advertisers through emails that if they didn't opt-out, their sponsored links would now be served to mobile searchers.

The move does seem to be to a second, 'final beta' phase, as advertisers will not be charged for mobile clicks until Nov. 18, and have been encouraged in the AdWords FAQs to use this time to test the performance of their mobile ads.

According to a Google spokesperson, the company went full-scale with mobile search ads, partly because of the sheer volume of mobile-ready ads in place, and because "the mobile space is an increasingly important part of how users are accessing information."

But the mobile team also knows that not all users have iPhones or other rich media-enabled handsets, so it may adapt advertiser landing pages for mobile browsers (although the advertiser also needs to have optimized the page on their own.) It's this last tech hurdle that some insiders say creates costly side effects for marketers who forget to opt-out.

"This is probably going to lead to some angry advertisers," read a comment on John Battelle's Searchblog. "Mobile ads had been treated separately; now they're part of an AdWords buy ... Some advertisers may have little or no ability to monetize mobile traffic."

For others it's a call to action, as according to blogger Darby Sieben: "Considering the growth of mobile and mobile applications, it is probably a good time to consider ensuring that your business can be viewed on a mobile phone." Sieben advised Webmasters to either read up on how to make WAP-friendly changes to the site--or invest in someone to do it for them.

Still, the question of whether the search giant's algorithm is smart enough to determine whether a user who enters 'BMW shop' in their mobile browser wants an auto repair shop or a dealership remains--and delivering the right kinds of paid results will be key to generating consistent user clicks and revenue.

Relevance is key, according to Omar Tawakol, chief advertising officer of Medio Systems.

"Based on Medio data, we've seen click-through rates on mobile search ads between 2 to 6%, and, of the people who clicked, conversion rates of up to 26.5%," Tawakol said. "This proves that relevant search results become a service to the end user."

And conversely--poor results will drag down the user experience--sending them (and advertisers) over to Yahoo, MSN, or some other, soon-to-emerge competitor.