Google’s Morning After

Yesterday Google announced results which weren’t quite as pant splittingly fabulous as the markets may have hoped and were pounded into dust accordingly…well slipped 3%…but who’s counting?  We can imagine the brilliant young things in Mountain View sobbing into their organic margaritas as they commiserate about the vagaries of the Markets. Their profits remain fabulous and growing but they are having to work harder to keep ahead. The received wisdom is that the revenue they make for every click continues to slide because we the end users have migrated to mobile devices much quicker than the the advertisers have been able to move their technology and their ad budgets to mobile.

That’s clearly true, what’s also happening is the continuing trend against advertising in general. As an advertising guy who fundamentally doesn’t like advertising  I have raged against the hand that feeds me for years. I was raised by the BBC which continues to be a gloriously a- free zone. I pay the premiums to get HBO, Starz, Hulu+, Netflix, Amazon Prime, Sirius and now Podcasting….you name it….any platform which will deliver quality content without stupefying interruption I’m there. Mobile devices are practically much harder to slather with advertising than desktop and the advertising on them can be splendidly easy to ignore….so we do.

What’s interesting is that for advertisers looking to reach buyers who have a time crunch or some kind of local need mobile advertising outperforms desktop by orders of magnitude.  Google has recognized this by quickly taking away our ability to target mobile only and requiring that we pay a 300% premium if we want mobile only clicks. So ironically mobile advertising is both cheaper than the norm for the big box advertisers like Amazon or BestBuy who would rather talk to the end user on larger real estate where they can lead them through their typical buying process (fill this out…click here…add credit card here etc) and super expensive for folks trying to reach customers who need a tow, a plumber or want to speak to someone about a replacement roof. The problem Google is experiencing is that there are many more large advertisers spending millions a month who haven’t yet transitioned to a fully mobile deployed solution.
Googles Chief Revenue Officer recently stated that Google sees mobile and local click prices rising dramatically as more advertisers get mobile. Until that happens they will continue to suffer a mobile hangover.

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