There are a number of ad forecasts that assume mobile display will constitute a very small portion of mobile ad revenue over time. While search is a compelling form of advertising on mobile devices the argument that display will be marginalized or insignificant is misguided and incorrect.

Search and display complement each other online and while search often gets credit for conversions (the "last click") and is perceived as the most effective form of online advertising the reality is more nuanced and complex. People are stimulated to search by traditional media, by conversations and by other online ads or promotions.

Search does have a role to play in "brand" advertising and increasingly search is evolving to allow for richer branding displays in results -- take Google and Yahoo!'s experiments with video in search results and brand icons, as well as Yahoo! Search Monkey, for example.

But a short survey of mobile display ads from the Yahoo! site yesterday should illustrate why display will continue to have an important role in mobile advertising: 

If I'm looking for a Lexus dealer the search ad works well. However in that context I've already formed a clear interest. How does Lexus stimulate my interest? The answer is traditional media, online display or  . . . mobile display advertising. 

The above ads for Clarion and Lexus are much richer and more interactive that the simple text ad in search. In a way they're like mini apps. Indeed, many branded apps are like uber-display ads that offer rich functionality. The issue with display ads is targeting and relevance. That's generally the place from which the anti-display prognosticators assume mobile display ads will wither: "nobody wants to see irrelevant display advertising on their handsets." 

True.

That's why all the flavors of targeting are being employed in mobile. There may be some regulatory hurdles to come around mobile behavioral targeting. But mobile display (defined here to include video advertising and any graphical presentation of ads) will be a large and important part of the mobile ad ecosystem for a long time to come.