Google’s annual run rate from mobile has now reached $8bn, which includes revenue from the Google Play app store as well as mobile advertising. As with all Google’s financials, that $8bn figure seems astronomical but only accounts for about 16 per cent of its total run rate.
As smartphone ownership is nearing 60 per cent of the UK population, according to figures from the IAB and PwC, advertisers, it’s becoming even more apparent that ad networks and media owners are still playing catch up.
Larry Page, Google’s CEO, says Google is “super well-placed” to take advantage of the “disruptive opportunities” mobile brings, as users switch throughout the day between their laptops, phones and tablets.
Google’s senior vice president and chief business officer Nikesh Arora told analysts the company is now focused on providing advertisers with more seamless functionality so they can be “free to think about their campaigns, while [Google does] the work of tailoring it to each platform”.
This is a sensible approach for Google, as a media owner, to take. That said, it is astounding how many brands still aren’t following this path.
Even today, in the supposed year of mobile (or the year after the year of mobile, or the…you get the gist), brands and agencies are still tasking themselves with projects such as “building our iPhone app” for no reason other than they don’t have one.
As Paul Berney, global CMO of the Mobile Marketing Agency told me earlier this week: “Saying ‘we need an app’ is a terrible place to start – think about how mobile extends and enhances what you are already doing”.
Conversely, when it comes to mobile display, some ad executives have told me they are offput from even attempting to spend on mobile after witnessing some terrible examples of advertisers merely attempting to replicate desktop display – with some rather tragic consequences.
Reputable brands are popping up in godawful fart apps or being served as massive intrusive banners against content or games that people actually want to engage with. This is still happening. It’s 2012 but mobile advertising – for the most part – still harks of the wild west early days of the dot com era. It’s embarrassing.
From Google to Facebook, monetising mobile continues to dog the digital industry. Mobile doesn’t appear to pay at the moment because media owners – and advertisers – continue to apply tried and tested techniques to a new medium. As such, planning and buying mobile media can be complex and difficult for the agencies – which isn’t a deliberate act to be difficult from the networks – but because the market is in an early stage.
It is up to the big players to charge the mobile advertising model – if anything, they need to in order to ensure they don’t get pushed off course by an as yet unknown competitor. They also must take strides to change the public face of mobile marketing and add some value to negate the cheap-looking banners and buttons.
Mobile has already served to change human behaviour and it’s slowly changing the advertising model too – to become more narrowcast and more focused around utility.
It’s not 4G, or the latest iPhone, or Windows 8 that’s going to shake up the mobile advertising model, it will be the slow appreciation of the fact that mobile marketing must act as a service, amazing entertainment or at least something that enhances an already-existing mobile experience.
It’s up to the media owners to provide advertisers with the opportunities to prove their worth on mobile and tidy up what is still a very messy desktop-imitation space.