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Google has already been selling mobile text ads through its cost-per-click AdSense program, which it is now expanding to offer contextually targeted graphical banners, formatted to fit within the constraints of the mobile browser.

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Nevertheless, Apple's (NASDAQ: AAPL) iPhone has shown that with a decent screen size and intuitive navigation, U.S. consumers will use their phones for activities other than talk and text messaging. Google is hoping that efforts such as its own Android initiative will lead to a new generation of handheld devices that help the mobile Web live up to its promise.

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JupiterResearch analyst Neal Strother concurs with Google's claim that mobile display ads have a higher clickthrough rate than Web display ads. A clickthrough rate of 5 percent to 6 percent for mobile ads is common, Strother said, whereas a 3 percent clickthough rate for online display ads is very high.

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Part of that success for mobile ads could relate to the novelty of the format, Strother suggested. As people grow more accustomed to seeing ads on mobile Web pages, clickthroughs will decline, the argument goes.

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Over the past year, Jupiter estimates that fewer than one-fifth of all companies created any type of mobile advertising. The firm projects that in the next year, 34 percent will be advertising on mobile devices, but of those, more will engage in some kind of texting campaign than search or display advertising.

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While "some of the bigger brands have made some serious commitments to mobile," Strather said that the tendency among advertisers is to make mobile a microcosm of an aggregate digital budget, or to treat mobile advertising as an experimental expense.

"Very few companies on the advertising side have made mobile a standalone item on a line-item budget," Strother told InternetNews.com.

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The company is trying to keep file sizes small, so that the ads do not unduly slow the load times of mobile Web pages, Agarwal said. Slow speeds have been a common complaint about the experience of browsing the Web on a mobile device.

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Google also said it will only show one display ad per page.

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