Google engineering vp Vic Gundotra said during a webcast to analysts that search ad rates on mobile phones could surpass the rates of PC ads.

Mobile ad rates have increased dramatically in recent years, while the number of Google searches on mobile phones has increased five-fold over the last two years, he said (via Reuters).

The use of technology such as GPS data that can tell Google where the user is and thus allow the company to serve more relevant mobile ads will help drive adoption and boost rates, Gundotra said. He also said that mobile search is mostly additive to PC search, pointing out that mobile queries spike when users are away from their desks during lunch or on the weekends, writes MediaBuyerPlanner.

Google Bets Big on Mobile

Google itself is firmly committed to the mobile ad space, having announced plans to acquire mobile ad firm AdMob for $750 million. The acquisition is currently undergoing regulatory review. Google and AdMob combined control about 21% of the mobile ad market, which will be ever more significant as the mobile ad space gains in popularity, according to Fast Company. Google CEO Eric Schmidt has said in the past that Google is a “mobile first” company.

Smartphones Speed Adoption of Mobile Advertising

Mobile ad rates are already skyrocketing, thanks to the growing popularity and capability of smartphones. Smartphones now represent nearly 20% of the U.S. handset market - and a much larger portion of new handset sales, writes Search Engine Land.