Exaggerating The Mobile Threat To Google

from the sorry,-don't-see-it dept

There's a Business Week article making the rounds saying that it's not Microsoft or Yahoo that's a real threat to Google, but the rise of the mobile web, which will somehow shrink ad inventory and cause headaches for Google. It's a nice theory, but it's hard to square with reality. Increasing use of the mobile screen is hardly likely to decrease usage of a full computer screen. If anything, it will likely make desktop computing more useful in some cases. The article also makes a few other questionable statements. First, it points out that the mobile screen is smaller, so there's less ad inventory, and then it points out that the growing acceptance of the mobile web is due to the web browser on the iPhone. That sounds good, but the points contradict each other. The success of the iPhone's browser is due to the fact that it presents a full (not limited) web browsing experience -- so it doesn't really limit the inventory available to Google. Furthermore, even if the inventory was limited (which seems unlikely) that's not necessarily a bad thing for Google. Google's success has been based on making ads more relevant -- not just more available. This was what resulted in so much confusion during Google's recent earnings announcement. Google had made some changes to drive more relevant clickthroughs -- and while that may lower actual clickthroughs, it increases revenue. So, even if inventory is limited, if Google is still the best at making ads relevant, it will do just fine.
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Filed Under: ads, mobile, real estate, search
Companies: apple, google

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  1. icon
    Derek Kerton (profile), 30 Apr 2008 @ 10:53am

    Location, Actionability, Relevance

    Mobile ads, or ads served on a mobile device like a phone, will actually often pay MORE per click than ads served to a PC.

    While a PC ad is more likely to get you to casually browse to it, a mobile ad is more likely to get immediate action. When mobile, you could actually stop in at a McDs to get a shake: it's immediately actionable.

    Moreover, Location awareness can make the ads far more relevant. Imagine if the ads you saw on your mobile device came mostly from retailers and businesses that were within a couple of KM from your current location. Those ads would get better sell-through rates, and thus would pay more per click. That's good for the Goog.

    If you think of the Google as a search provider, as some do, then you can imagine how relevant and actionable an ad placed on a mobile device can be. Consider a user who searches for Pizza on the mobile phone. Consider that an ad sold to the results page could say: "Gino's Pizza: 1.3 miles East, and $2 off. Click here for more." 'More' in that context would mean the ability to call, order online, see a map, or get turn-by-turn directions. That scenario is non-intrusive, relevant, location aware, just-in-time, and drives revenue for Gino. Do you think Google (or Yahoo, whatever) could sell such an ad system?

    Mobile is new real estate for the advertisers. They will make more money because of it, not less.

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