Point, click and discover the future of advertising?

This is the fourth in a series of postings on the emerging business models of the Mobile Web.

I mentioned in an earlier post the killer iPhone app for me was always going to be a hybrid of Facebook and location intelligence that would allow you to discover who was nearby to catch up for a coffee or a beer.

Today this unique blend of contacts, location and context is fast becoming the campaign blueprint for the next generation of creative Advertisers and Marketers.

Mobile Marketing Magazine reports that new research conducted by the Internet Advertising Bureau (IAB), reveals that 73% of marketers believe mobile will be the medium to see most growth over the next five years.

Advertisers and Marketers around the world are clearly hyped up about the unlimited potential of the Six Degrees of Separation and the marketing and promotion of mobile relationships through the merging of the social or business networks of Facebook and Linked In with the mobile phone network.

Couple this referral network with the power of mobile search and location intelligence and you have the ultimate advertising and promotions platform… the mobile phone.

That why the advertising industry is buzzing with ideas to repurpose old technologies like QR Codes and Bar Codes into mobile tagging and branding campaigns. 

These QR tags are very popular in Japan. They allow advertisers to post links to their promotions in every geographical location. Newspapers, magazines, street corners, buses, taxis and even people and T-Shirts become branded homing devices that allow anyone with a mobile phone camera to Point, Click and Discover the message, offer or promotion behind the printed code.

A quick search of TechCrunch for location based advertising will show you just how hot the idea of mixing Facebook and location intelligence with mobile phones is at the moment. ReadWriteWeb has made available a good primer with their article The Future of Advertising is Shakable and Location-Based.

For the more moderate observer mobile might be the most overhyped advertising channel of our time. Chris Lake, the editor in chief at Econsultancy published 10 reasons why mobile advertising is doomed back in 2007. While Andrew Gill’s post last year on what is holding mobile advertising back was an informed discussion on the barriers to entry for the emerging mobile advertising market.

As any mobile phone applications developer will tell you the biggest problem is the proliferation of non-standard devices. Even the over-hyped iPhone fails to address this issue. It’s small market share merely adds to the complexity mix.

There is also the ongoing public debate and calls for stricter regulation and monitoring of the more highly targeted and personalized forms of advertising.

The Interactive Advertising Bureau reports that Mobile has long represented little more than a rounding error in most advertising and marketing budgets, despite the burgeoning number of mobile users and their increasingly sophisticated devices and usage patterns. However a Change Is in the Air for Mobile Advertising and Mobile marketing is here to stay.

That change of course is Google. Google’s $750 Million of AdMob has repositioned Mobile Marketing as a mainstream advertising option.

Why?  Isn’t the Google deal is similar to the mobile advertising acquisitions that AOL, Microsoft, and Yahoo have made in the past two years? Indeed aren’t there are more than a dozen mobile ad networks? So what makes this deal so special?

Google paid more for AdMob than what the entire mobile ad market is worth. It was a statement of intent from the internet’s market leader.

Google has paid a very big price to get a strong position in mobile. So it is not going to go unnoticed by the global advertising and marketing community.

As Julia Boorstin of CNBC estimates in her article Why Google is Paying $750 Million for Ad Mob, mobile ads were responsible for just $416 million in 2009 revenue, a tiny piece of the $24 billion online advertising pie. But mobile ads are expected to be one of the fastest growing categories as smart phones become pervasive.  Bloomberg suggests the U.S. mobile-ad market should reach $2 billion to $3 billion by 2013. So will it be a smart buy?

Obviously Google thinks so. It compliments their existing online search engine and aggregated advertising networks and with this acquisition, Google becomes the largest player in the mobile-advertising industry with an estimated 30 percent to 40 percent market share.

Is there a risk with this strategy? Google and the other aggregators clearly see their investment in mobile advertising as an extension their successful online strategies. If the mobile web is just the web represented on a mobile web browser then the risk would appear to be minimal. The problems will arise if the mobile web proves to be something very different from the desktop web.

At the moment though it looks like the future of marketing and communications will be “Google on the move“.

Today, Telco’s are thinking they are in the business of managing Mobile Relationships. Aggregating synergies between their customers and advertisers. The reality is a little different.

Once again, while the advertising and content aggregators manage the low risk revenue flows, the Telcos are left funding the high risk infrastructure and the costs of maintaining the network. Meanwhile the media outlets are reengaged across the network to produce very expensive, but inevitably low to zero value, content .

The new industry model has Google placed in the pivotal position to regulate the flow of advertising and content revenues across the value chain.