This morning Jeff Lindsay of Bernstein Research released a report called "The Long View: How Will The Wireless Internet Impact Online Advertising".

Jeff is as bearish as we are about the size and composition of the intermediate-term mobile advertising opportunity:

Specifically:
 
1)    The mobile ad market will remain active, but small in the near-to-medium term, and

2)    The larger players will take most of this ad spend over the next five years. 

In particular we believe Jeff is right for the following reasons cited in the report:

  • Internet viewing habits are fundamentally different between mobile and PCs.  Mobile users spend less time surfing the internet, don’t perform as many “random” searches, and don’t click on ads nearly as much as PC surfers.  This will cause most advertisers, despite increasing interest in and curiosity abou mobile, to remain cautious.
  • Yahoo and Google will account for about 50% of mobile advertising by 2013.  Bernstein doesn’t go into detail about why the largest players will dominate the market over the next few years.  But here's the logic we've heard: When advertisers do “dip their toes” in mobile they will turn toward the larger players with legacy agency relationships versus smaller, newer players. 

More on our mobile-ads-will-be-smaller-than-you-think thesis here.

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