It is no surprise that mobile display has become increasingly sophisticated in the past year as marketers get a better understanding of the medium's strengths. However, with search expected to continue dominating most mobile ad spend, it is becoming trickier for marketers to balance a mobile ad budget.

A recent report from eMarketer finds that although mobile display is advancing with better targeting and new formats, the medium will not catch on as quickly as some expect in generating the majority of mobile spend in the next few years. Therefore, marketers will need to significantly justify their display spend when it comes to testing new mobile ad formats.

?Mobile spend will inevitably rise as it increasingly becomes the place where one accesses the Internet most frequently,? said Jonathan Adams, head of media for North America at iCrossing, New York.

?Display ad developers and advertisers need to understand a consumer's tolerance in each advertising space and design their messages accordingly,? he said.

?One-size-fits-all does not apply in this environment. Just as you would not put legal copy on a billboard, nor should you try to put a paragraph in smartphone ad. The future of mobile advertising will be about both form and function and it is on us to know thy consumer behavior and act accordingly.?

Search gains
As more consumers turn to their mobile devices first to search, advertisers are increasingly shifting more desktop search spend over to mobile.

EMarketer's recent report found that 51.5 percent of mobile ad spend will be devoted to search this year versus the 44.8 percent that will go to mobile display. Additionally, 22.1 percent of total search budgets will go towards mobile this year, up from 2.1 percent in 2010.

Mobile display is also expected to grow from 21.7 percent of total display spend to 48.4 percent by 2017.

Although total search spend will begin to dwindle over the next few years to digital display, mobile display specifically will not make significant gains to pull in more money than mobile search by 2017, per the report.

Better display
According to Mr. Adams, mobile display is a valuable place for marketers when it comes to reach and targeting, but still has a ways to go when it comes to tracking a consumer through the conversion process.

Search is still a cost-effective and easy way to drive conversions for marketers because advertisers are able to deliver a piece of information to consumers that are specifically looking for something quickly.

Additionally, direct response advertisers are responsible for a significant portion of mobile search spend because they are able to not only drive conversions but also leads.

On the display side, the lack of cookies is becoming a growing frustration for marketers with mobile as more brands are interested in connecting advertising across multiple screens, which is likely also hindering display spend and advancements.

Therefore, marketers should be focusing on mobile display for more than a simple transaction and consider leveraging pieces of data that move display ads closer to the same kinds of targeting that search offers.

?As display ads leverage data to become more targeted, brands are recognizing that display ads can now drive conversions and sales as well,? said Bill Clifford, chief revenue officer at SessionM, Boston.

?Many brands are recognizing that highly targeted, rich media display ads can be as effective, if not more effective, than search at driving lower-funnel conversions,? he said.

Similarly Mr. Clifford believes that as more publishers ditch banner ads for native placements that focus on consumer behavior, more mobile display spend will follow with the focus on brand building.

Another interesting up-and-coming opportunity for marketers around mobile display is with location-based apps that match searches with relevant ads.

Foursquare and Yelp are two of the big frontrunners here and have both made substantial advances in the past year with targeted ad buys for marketers.

For example, foursquare recently rolled out an ad product that lets advertisers serve ads to consumers after they check-in to a location, which presumably is more targeted because it is based on a consumer?s actual check-in behavior (see story).

These types of opportunities will ultimately fuel mobile display to eventually overtake search, according to Shawn Scheuer, CEO of Opera Mediaworks Performance, San Mateo, CA.

?People are simply not searching on mobile the way that they do on desktop,? Mr. Scheuer said. ?Location-based apps can match ads in a search-like fashion, but their ad inventory is display.?

Finding a mobile ad that clicks
Mobile?s role in overall digital ad spend is clearly growing, but some brands are still unsure of which types of ads work best.

With many marketers still in the experimentation stage with mobile, drastic shifts in ad budgets are likely unrealistic in the coming years according to some experts.

For example, mobile search algorithms are becoming more precise, but there is still more growth coming from mobile search that may further the split between display and search spend.

?I think mobile is still very uncharted territory and advertisers are still wrapping their heads around what works and what doesn't,? said Craig Elimeliah, vice president and director of creative technology at Rapp, New York.

?We are still very much experimenting with how to be more contextual and native  when it comes to mobile ad buys,? he said.

Final Take
Lauren Johnson is associate reporter on Mobile Marketer, New York