Pundits blame mobile for Google's results

22 Oct 2012

re: Last week’s disappointing results from Google –

You can blame mobile for that. Or specifically, mobile ads.

Google reported that the average “cost-per-click” spread across all its ads dropped 15% compared to the same time last year, and analysts are blaming mobile specifically for that, as mobile ads have lower value than those served to desktops or laptops, according to Wired Business:

[BGC Financial analyst Colin] Gillis points out that the downtick in Google’s “cost-per-click” over the past year coincides with Android’s surge in popularity. As more ads are served on Android, their value goes down compared to the non-mobile web.

“There is some cannibalization going on,” Gillis says. “And mobile clicks monetize at about 50 percent of traditional clicks.”

It’s not just about the low value of mobile ads, though – according to TapSense founder and CEO Ash Kumar, it’s also a reflection of Google’s dependence on browsers instead of apps to monetize them, reports Mobile Marketer:

“Google is currently missing out on more than 90 percent of mobile ad strategies that use in-app advertising as their primary mobile advertising approach, it needs to find a way to quickly become app centric.” […]

“Consumer app adoption is at an all-time high and Google’s continued focus on Web browser pages and search via its PC-centric approach is quickly becoming obsolete – today’s report is a clear indicator of that,” he said.

Meanwhile, Google chief Larry Page was quick to emphasize during the earnings call that the company is “tremendous innovation in advertising, which I believe will help us monetize mobile queries more effectively than desktop today.”

Page also said Google is on track to rake in $8 billion annually from mobile, though that includes music, videos and apps sold in the Google Play store, not just ads.

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