There were two related events this morning that raise the question of what’s at stake for Google if it gets ousted from its position on the iPhone as the maps data provider. On the surface the two events may not appear directly related, but they are.
First, the IAB put out an estimate of global mobile ad revenues for 2011 this morning: $5.3 billion in 2011. It turns out, according to these numbers, that paid search is 61.7% of the global total. In the US the number is 48.3%, which is very close to the 46% for paid search on the PC.
Search is where most of the locally targeted ad revenue currently resides, although the display side is growing via the efforts of companies such as xAd, YP (formerly AT&T Interactive), Think Near, JiWire, Verve, PayPal and a few others.
Kelsey pegs the local component of mobile ad revenue at roughly 50% today (someone can correct me if that’s not right). However much more realistically it’s closer to 25%. It will surely grow dramatically over time, with SMBs being pumped into mobile ad distribution and national-locals increasingly recognizing location as strategic.
Now back to Google-Apple. This morning was the Google “next dimension” mapping event. I covered it live over at Search Engine Land. The “elephant in the room” (never discussed) was the impending launch of Apple Maps/iMaps at the WWDC event.
As I’ve said Apple Maps also means Apple is now in local search. What we don’t know is how good Apple’s product and local search capability will be. Currently its marriage of Siri with Yelp results is OK but not competitive with what Google offers. Hopefully we’ll get a much improved capability from Apple.
If Apple’s maps and local search functionality are weak, then Google will see little or no impact from the introduction of Apple’s mapping product — especially if Google itself introduces an improved iOS mapping app. However if Apple hits a home run then we may see local search volumes lost to Google on the iPhone.
If users switch to using Apple’s local search, and this is a big “if,” then they won’t be using Google. That means that Google could see diminished mobile search and especially diminished local search revenue from the iPhone and iPad.
Currently Google says that local search volume is 40% of overall mobile query volume. Local search advertising through mobile AdWords is probably not commensurate with that consumer volume at the present moment.
Apple probably won’t have an ad product/opportunity at launch for its maps; Apple doesn’t care that much about ad revenue. But marketers will be clamoring for one if the Apple product is a hit.
See related: Apple Getting into Local Search Bigtime