Search beats display by large margin in mobile ad spending, study shows

Google Search on Mobile

Facebook better hurry up with that search engine it’s reportedly building. A new survey of the mobile market shows that search ads are outstripping display ads by a wide margin in every region of the world.

According to a report from the Interactive Advertising Bureau, mobile ad buyers in Europe and Asia are spending almost three times more on search: a combined $2,284 million versus $858 million. In North America, the discrepancy is smaller but still tilted heavily in favor of search over display: $811 million versus $572 million. Ads related to mobile messaging make up a much smaller category.

The new figures could further muddy companies’ efforts to solve the mobile ad problem that helped sandbag Facebook’s big IPO last month. Even though ad pundits have predicted that 2012 (and before that 2011) is the year mobile advertising takes off, the heralded boom has yet to arrive.

The problems include smaller screens that are less friendly to display ads and a sense that mobile ads are inherently intrusive. Still, the advertising industry remains tantalized by the promise of a mobile ad breakthrough that will let it deliver personalized messages to consumers wherever they go.

Research firm eMarketer predicts U.S. mobile advertising will grow five fold to $10 billion by 2016 and the spending split between search and display will be about equal.

In the meantime, Facebook is redoubling its mobile ad strategy by offering marketers a chance to buy “sponsored stories” within users’ mobile feeds. At the same time, Forbes reports that Google is attempting to consolidate various pieces of the fragmented industry so as to give advertisers a chance to serve and track the same ad across a variety of platforms.

(Clarification - A Facebook spokesperson provided the following statement: “Marketers were able to buy sponsored stories on mobile as part of a bundle since fMC earlier this year. [The] announcement just makes it possible for them to buy sponsored stories on mobile separately from other placements.”)

Here’s a shot of the ad breakdown from today’s report:

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