Trend: Web advertisers will increasingly rely on personalization because cell phone screens are too small to display many ads.
Businessweek describes the future of online advertising on small screens and the Google's strategy to adapt. Excerpts below.
Link: The Real Threat to Google.
As more people use cell phones and their tiny glass screens to gain access to the Internet, Google and its fellow online advertisers will have less space, or what's called ad inventory, to place marketing messages for customers. Google makes money selling ad inventory. And its ad inventory is diminished on a cell phone.
Google can now fit about 10 ads on a standard computer screen. (If you look at Google search results on a PC monitor, paid ads are the listings at the very top and along the right.) But on your cell phone, if you type in a search query at google.com you get only one or two paid ads in response.
Almost two-thirds of Americans have had some experience with mobile Internet use, and the adoption trend is most pronounced among teens and young adults, according to Pew Research Center. About 60% of adults 18 to 29 use text messaging every day, compared with only 14% of their parents. Nearly one-third of young adults use mobile Internet. This is the future, because people take their media habits with them as they age.
Google will try to expand ad "shelf space," especially by redesigning cell-phone software. In November, Google announced it was launching an Open Handset Alliance to design a new operating system, code-named Android, which would provide a "truly open and comprehensive platform" for cell-phone users. A few scratched their heads as to why Google would get into the cell-phone interface business. But now it's clear; Web screens will soon be two inches wide, and Google wants a say in what fits on that tiny screen.