In July Google made the changes to its advertising system to address a fundamental problem: More of its
searches are coming from mobile devices, but ads on mobile devices are
cheaper, because they generate less-valuable clicks. Goldman Sachs estimates that on average, Google's mobile ads sold for 35% less than desktop ads in the third quarter. Under the new policy, advertisers can no longer bid on
keywords for separate devices. Tablet computers are treated the same as
desktops. Meanwhile, advertisers' control over smartphone bids is now
more limited.
Facebook have confronted a similar issue, as users shift to mobile. RBC Capital Markets analyst
Mark Mahaney
says enhanced campaigns are Google's attempt "to entice, cajole and force advertisers to catch up" on mobile.
Several reasons why mobile ads are cheaper. Users might not be in the mood to buy things while surfing the Web on a smartphone. Meanwhile, many advertisers have been slow to optimize their websites for smaller screens, making it harder to capitalize on mobile clicks.
Mobile has been more of a speed bump than a roadblock for the search company. While average click prices are down, the volume of clicks has grown rapidly. Volume was up 23% in the second quarter compared with a year earlier. EMarketer estimates that Google will control 53% of the nearly $17 billion world-wide mobile ad market this year.
With enhanced campaigns, it will be interesting to watch Google becoming even more upwardly mobile!
Several reasons why mobile ads are cheaper. Users might not be in the mood to buy things while surfing the Web on a smartphone. Meanwhile, many advertisers have been slow to optimize their websites for smaller screens, making it harder to capitalize on mobile clicks.
Mobile has been more of a speed bump than a roadblock for the search company. While average click prices are down, the volume of clicks has grown rapidly. Volume was up 23% in the second quarter compared with a year earlier. EMarketer estimates that Google will control 53% of the nearly $17 billion world-wide mobile ad market this year.
With enhanced campaigns, it will be interesting to watch Google becoming even more upwardly mobile!
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