With new executive, Google steps up mobile ad efforts

SAN FRANCISCO Mon Feb 7, 2011 12:03pm EST

A model demonstrates a Nexus One smartphone at Google headquarters in Mountain View, California January 5, 2010. REUTERS/Robert Galbraith

A model demonstrates a Nexus One smartphone at Google headquarters in Mountain View, California January 5, 2010.

Credit: Reuters/Robert Galbraith

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SAN FRANCISCO (Reuters) - Google Inc is reaching out to some of its top advertising customers to promote its mobile marketing services, as the Internet giant moves to expand its advertising business from computer screens to smartphones.

The effort is being overseen by Karim Temsamani, Google's first-ever head of mobile advertising, who quietly began the job in October.

"I don't see any reason why mobile advertising won't be relevant to every single advertiser," Temsamani said in an interview with Reuters on Friday, the first time that Google introduced Temsamani in his new role.

Google will hold an event with advertising clients in New York this week to showcase ways in which they can extend marketing campaigns with mobile-specific features such as click-to-call ads, and how marketers can track the effectiveness of mobile campaigns.

The company plans to have more such events with advertisers around the world, said Temsamani, a Frenchman who was previously the managing director of Google Australia and New Zealand.

Analysts believe that mobile advertising is one of the key opportunities for new revenue growth for Google, which generated the vast majority of its roughly $29 billion in revenue last year from search ads that appear on PCs. Google said in October that its mobile ad business was generating revenue at an annualized run rate of more than $1 billion.

Google's mobile ad efforts are separate from its Android product, the smartphone software that Google gives free to handset makers including Motorola Mobility Holdings Inc and HTC Corp. In the fourth quarter of 2010, Android became the No. 1 smartphone operating system in the world by market share, according to research firm Canalys, ahead of Nokia Oyj's Symbian software and Apple Inc's iOS used in the company's iPhone.

The competition with Apple is extending into the advertising side of the business. Google and Apple both tried to acquire mobile advertising firm AdMob last year, with Google's $750 million bid ultimately winning. Apple launched its iAd service last year, allowing marketers to deliver rich advertisements directly within applications, like games and news programs, used on the iPhone.

Temsamani said the market for mobile advertising is currently growing so fast that there is sufficient room for both Google and Apple to thrive.

"I don't see this as a zero sum game as much as we don't see Apple iOS and Android as zero sum games," he said. He noted that Google's mobile ad efforts are much broader than Apple's, focusing on display ads, search ads and other types of ad formats aimed at consumers using various types of smartphones.

Searches on mobile devices with full-fledged Web browsers increased by a factor of four last year, according to Google. Google has said that its click-to-call ads, which allow consumers to tap a link and instantly call a business, generate millions of calls to advertisers every month.

Some analysts believe that mobile ads, which can factor in a consumer's physical location to provide a more targeted pitch, could eventually command higher rates than desktop ads. But Temsamani said looking for ways to generate richer ad rates is not the No. 1 priority for Google's mobile business at the moment.

"Our focus should be now to get more of the advertisers coming through, not hiking rates in one way or another," he said.

(Reporting by Alexei Oreskovic, editing by Matthew Lewis)

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