Counterpoint: Google’s Huge Mobile Revenues Point to Mobile Advertising’s Weakness

 

Of the many huge numbers put up by Google in its earnings results yesterday, one stood out at us: the company is on track to turn mobile ads into a $2.5 billion business this year. That’s pretty remarkable, considering EMarketer estimates all of mobile advertising to be a $1.23 billion business in its entirety in the U.S. (Google’s figure is global.)

What’s going on here? Well, it might be somewhat bad news for the mobile ad business if you’re equating it with banners. Mediassociates strategic planner Ben Kunz writes on Google Plus that the results are just a sign that display is failing in mobile because, in his estimation, 90 percent of Google’s mobile ad revenue comes from search, despite its huge mobile display push with the AdMob purchase.

“The challenge with ‘ads’ on mobile — real ads, not search text links — is they interrupt consumers in an intimate space, amidst limited screen inventory, and are too easy to bypass with the scores of apps we each load onto our phones for one-click sports or weather information,” Kunz writes. “The app user experience has made tertiary advertising unwanted, unneeded, and unnecessary.”

There’s little doubt the mobile display business still faces a raft of issues. On a panel I moderated yesterday, Digitas mobile ad executive Ryan Griffin told me that the fragmentation in mobile made agencies mostly dependent on networks for any kind of scaled buy. What’s more, the critical infrastructure — serving, reporting, etc. — remains a high barrier. Then there’s the targeting and uncertain return issues. In his view, the industry’s grown quite a bit from its novelty factor. Agencies and their clients recognize the obvious consumer phenomenon and want in. But that enthusiasm will wear out of networks and publishers don’t ultimately show that this stuff works, he said.

https://digiday.com/?p=2222

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