Now that mobile smartphones have reached the 50% penetration rate in the U.S. market, the mobile ad market is about to heat up. A big jump is expected for both smartphone and tablet mobile ads. Marin has just released its projections for this market and the numbers are worth a look.

The way Marin sees it, about 12% of all clicks on Google at the end of 2011 were from mobile devices. That level represents a 132% increase over the previous year. While mobile paid search ad budgets increased last year, they didn’t keep pace with the rate of interest in the format. By year end, advertisers were allocating from 8.7% of their paid search budgets to mobile.  It’s likely that the rapid growth rate of mobile will continue through 2012 as consumers shift to mobile devices for much of their digital interaction. So, by the end of 2012, nearly 24% of paid search clicks on Google will come from mobile devices. Marketers are expected to follow this trend, upping their paid search spending budgets to about 23% of mobile campaigns. These projections suggest that advertisers will be increasing their mobile paid search campaigns to nearly match the expected level of traffic on mobile.

Marin analysts caution that the next step for marketers is to determine how traffic differs between tablets and smartphones and that can ‘depend on an advertiser’s industry, audience and geography.” Top-level data indicates that about 45% of mobile clicks will come from tablets by December 2012.

Currently, statistics show that consumers like clicking on smartphone search ads and, for now, these ads are less expensive than the other digital platforms. Here are the average click-through rates  and cost per click by device:

  • Computers: 2.39% ($0.83)
  • Smartphones: 4.12% ($0.53)
  • Tables: 3.12% ($0.63)

Despite the excitement about mobile, the conversion rate for computer-based ads still remains tops at 5.2%. Analysts suspect that the current conversion statistics for mobile are low because shopping apps make these numbers harder to track. They also believe that tablets have the lowest cost per conversion. The impressive results from tablets with respect to paid search campaigns make it likely that marketers will focus efforts on that front.

[Source: State of Mobile Search Advertising in the US – 2012. Marinsoftware.com. 2012. Web. 4 Apr. 2012]