Mobile Search Apps Taking Chunk of Google Ad Share

People are increasing the ways they search on mobile, causing Google’s mobile ad share to suffer, according to a report by eMarketer.

Mobile users are searching on smaller niche apps more and more, causing a fragmentation of the mobile search advertising space.

Google’s share of the $2.24bn market has dropped from 82.8% in 2012, to 68.5% in 2013, according to eMarketer’s estimates.

During this period, the share of alternative search companies increased from 5.4% to 22.9%.

They expect Google’s share to continue its decline to 65.7% this year, and these other companies to continue their growth to 27.3%.

Cathy Boyle, senior analyst for mobile at eMarketer, said: “Even though browser-based search is a common behavior among mobile owners, search engines are not necessarily the first place smartphone and tablet users turn.

“The explosion of mobile app development and usage means mobile users have more–and more specialized–alternatives for finding information.”

The total spend of mobile advertising in 2014 will be $17.73bn, and over half of this will come from mobile search.

eMarketer defines mobile search advertising as paid ads on search engines, search applications and carrier portals to all mobile devices, whether smartphones or tablets.

They predict that by 2018, mobile search will account for 85.9% of the entire US digital search advertising market.

Boyle said: “App-based searching is a new phenomenon that pales in comparison with the longstanding practice of querying a search engine, and the degree to which mobile users rely on both methods for finding information is unclear.

“Still, in light of the growing popularity and time spent with apps, search marketers that recognize this behavior and focus on increasing visibility within apps aligned to their industry and business objectives will be best positioned to connect with the largest number of mobile users.”

Yelp is one such company that is emerging from this alternative pack – despite representing 1.3% of the market, eMarketer expects their revenues to grow 136% to $119.4m this year.

Other alternative search portals include Bing, Yahoo, travel search KAYAK, job search sites like Indeed, Amazon and music-search app Shazam.

These services charge advertisers for listings, and are starting to see gains in their mobile ad revenues.

eMarketer bases these forecasts on worldwide and local trends in economy, technology and population.

They analyse data from research firms, company reports, government agencies and media outlets.

See the full report here.