Mobile paid search is set to become the largest digital advertising product segment in Australia by 2018, according to technology analyst firm Telsyte.

The report released today predicts the Australian mobile paid search market will reach $430 million this year, which equates to almost 25 per cent of the $1.74 billion market, on the back of a consumer shift to "post-PC" or mobile devices.

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Advertisers appear to be taking advantage of the trend with advertising listings increasingly appearing on smartphones and tablets.

Telsyte estimates there are currently 14 million smartphone and 7 million tablet users in Australia and nearly 30 per cent of paid search links were served onto mobile devices in Q2 2013, growing to 33.3 percent by Q4.

Tablet paid search is the largest segment, expected to generate $240 million or 56 percent of the total mobile paid search market in 2013.

Paid search advertising consists of sponsored listings which can appear in user search results and is the primary revenue generator for search giant Google.

Using a transparent methodology and cross-checking with a range of published reports, local search marketing agencies and search engines, Telsyte also found the mobile paid search market to be growing at a 17 per cent compound quarterly rate.

By 2017, Telsyte forecasts mobile to make up more than half of the Australian paid search market, making the largest digital advertising product segment in Australia by 2018.

Telsyte research director Foad Fadaghi said there had been a lack of clarity about the consumption of, and spending on, mobile search advertising in Australia.

"Mobile device search advertising is growing faster than most observers realise so we have published a complimentary report to assist marketers in understanding this significant trend," he said.

"Notwithstanding the difficulties in measuring mobile search, many advertisers are serving their search ads on tablets and smartphones by default, following changes to Google's targeting options."