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Yahoo Rolls Out PPC Ads In Mobile Search Results

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Yahoo is launching (in beta) paid-search ads in mobile in the U.S. and expanding its test program in the U.K. Only a "select group of advertisers" are initially included (it's not clear what the criteria are). But the number of advertisers will expand over time as the program rolls out.

According to the press release, "consumers will be able to click on the sponsored search results to go to the advertisers' mobile web site or a landing page to get more information about the advertisers' offerings, including the ability to call the advertiser."

Yahoo had already been running tests of mobile PPC ads in the U.K. and Japan.

According to CTIA-The Wireless Association, there are more than 194 million wireless subscribers in the U.S., with a market penetration rate of about 65%. In other countries, especially Northern Europe, penetration rates exceed 100%. And China claims over 400 million mobile phone subscribers.

Indeed, as Yahoo's Terry Semel and Google's Eric Schmidt have now pointed out multiple times (I'm paraphrasing), "There are more wireless devices in the world than PCs." As a result there's a great deal at stake in developing a viable mobile search capability and the advertising that goes with it.

According to an article today in MediaPost, which points to a study by mobile research firm M:Metrics, response rates to text (SMS) ads on mobile phones are "only" 7% vs. 29.1% or more in countries in Europe where mobile text ads are more common. Obviously a response rate of 7% is higher than average response rates to sponsored search online. There are several competing studies, however, that argue consumers are least interested in advertising in SMS vs. other mobile formats.

Not to confuse matters, Yahoo's new mobile PPC launch is not about SMS. Rather it's sponsored ads in mobile web search results.

Earlier this week mobile marketing firm Enpocket released the results of a study conducted by Harris Interactive with 1,200 mobile users in the U.S. Europe and India. The survey found general acceptance of mobile advertising deemed "relevant" by consumers. A majority of respondents (78%) said that "they would be happy to receive advertising that is tailored to their interests. Of those, 64 percent would be willing to provide personal details to be analyzed to improve relevance of targeted ads."

In general response rates in mobile tend to be higher than online because of relevance and less ad clutter -- there are fewer competing advertisers to click on (or call). PPCall firm Ingenio has repeatedly cited very high PPCall response rates for its advertisers in mobile, partly for that reason.

Mobile advertising is also great opportunity for local search. People are often looking for local information when they're on the go and have traditionally had to rely on directory assistance (DA), which has been limited by "what city, what listing?" rather than offering the open-ended ability to conduct a category search. Newer services are seeking to broaden the scope of DA, which is starting to evolve into voice-enabled mobile search.

Yahoo already offers most of its properties on mobile devices and in June of this year research firm Telephia found that Yahoo Mail was the most visited site by mobile users.

Google shows PPC ads on mobile search results as well.


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