Google Research: No Mobile Site = Lost Customers

From my Forbes.com blog The New Persuaders:

Google has increasingly pushed its advertising customers to create special mobile websites because, as we know all too well, most conventional websites look awful on a smartphone. Now, Google’s providing more research to back up its advice.

The search ad giant is hoping, of course, that the better mobile experience people have, the more they will use Google search to find sites and products. A poor mobile experience reflects badly not only on the sites but on Google searches that sent them there. That’s especially worrisome today as Facebook, to name one rival, and Twitter, to name another, double down on mobile advertising. And it happens that Google has some relatively new mobile ads to hawk as well.

So in a survey of about 1,100 U.S. adult smartphone users (not tablets, in this study) conducted by  market research firms Sterling Research and SmithGeiger and released this morning, Google offers advertising folks ammunition to get their laggard information-technology and marketing chiefs moving. A few of the highlights (or, in some cases, low points):

* Two-thirds of smartphone users say a mobile-friendly site makes them more likely to buy a company’s product or service, and 74% say they’re more likely to return to the site later. “Mobile is creating massive opportunity,” says Jason Spero, head of Google’s global mobile sales and strategy.

* 61% says that if they don’t find what they’re looking for (probably within about five seconds), they’ll click away to another site. Half say that even if they like a business, they’ll use its site less often if it doesn’t work well on their smartphone. “This is a wakeup call,” says Spero. “You will lose customers at the moments that matter” without a site specifically made for mobile devices.

* 72% of users say a mobile-friendly site is important to them, but a nearly unanimous 96% have visited sites that aren’t. “When you offer users a desktop experience on mobile,” Spero notes, “it’s kind of crap.”

Google’s advice: Create a fast mobile site with big buttons and text, keep steps to complete tasks to a minimum, and–you knew this was coming–promote the site with Google mobile ads for the two-thirds of people who use search to find a site. That last may be self-serving–though one Google mobile advertiser, online discount perfume merchant FragranceNet.com, told me that the ads were a significant factor in a 48% jump in mobile sales following its creation of a mobile site. But it’s hard to argue with the rest.

About these ads

Google To Steal Facebook’s Display Ad Lead in 2012–A Year Early

From my Forbes.com blog The New Persuaders:

After seeing Facebook vault into the lead in U.S. display-ad revenues last year, Google will take the top spot this year, according to a new forecast from market researcher eMarketer.

The search giant’s display revenues in 2012 will jump almost 39%, to $2.31 billion, while Facebook’s will rise 24% to $1.73 billion and Yahoo’s revenues barely budge to hit $1.39 billion. Overall, display ad revenues will rise almost 22% this year, to about $15 billion, thanks to Google’s and Facebook’s growth, the continuing explosion in ad inventory thanks in part to mobile advertising, and more spending on video ads, especially on YouTube.

But that number is down a bit from eMarketer’s previous forecast because of lower display ad prices on ad networks and continuing wariness by big brands to up their display spend significantly. Google and Facebook combined will account for nearly 30% of display ad revenues this year, rising to 37% in 2014.

What’s more, according to eMarketer, Google will lengthen its lead in the next couple of years in these banner, video, and social ads that are the mainstay of most commercial websites, reaching $4.4 billion in 2014 to Facebook’s $3.2 billion and a moribund Yahoo’s $1.5 billion. Microsoft and AOL also will continue to see relatively flat revenues.

What’s going on here? For one, Google’s display-ad engine has begun to rev, thanks to its YouTube video site, its mobile ads, and its DoubleClick ad-buying and ad exchange business. At the same time, Facebook has seen its growth slow recently, raising questions in the minds of investors about the effectiveness of its social ads and its relative lack of mobile ads. Earlier this year, eMarketer had forecast that Google wouldn’t capture the display lead until next year. …

Read the complete post at The New Persuaders.

The Early Bird Gets The Worm: Twitter Beats Facebook In Mobile Ad Sales–For Now

Twitter is stomping Facebook when it comes to selling ads on mobile devices, according to a new study out this morning.

According to eMarketer, Twitter grossed $129.7 million in mobile ad sales in the U.S. vs. Facebook’s $72.7 million. To some extent, that’s not saying much, since Google and even Pandora, each selling mobile ads for at least a couple of years now, beat both of those companies. In particular, Google dominates thanks to its mobile search ads, which constitute more than half of all mobile ads, though for display ads alone, Google is just barely ahead of Pandora.

Overall, according to eMarketer’s crystal ball, mobile ad sales will total $2.61 billion this year, rising to $12 billion by 2016 (though you’d do well not to put too much stock in forecasts that far out). These are net revenues after paying distribution partners. This year’s tally is still only about 1% of overall online ad sales.

eMarketer’s capsule analysis of Facebook’s and Twitter’s mobile results and prospects indicates the latter company won’t keep its lead for long. …

Read the complete post at The New Persuaders.

Google Shuts Off TV Ads Business

From my Forbes.com blog The New Persuaders:

After five years of trying to sell ads on television using the automated buying system that works so well for its signature search ads, Google has finally given up. In a blog post this afternoon from Shishir Mehrotra, VP of YouTube and video, the ad giant said it will shunt the group’s staff to other projects:

Video is increasingly going digital and users are now watching across numerous devices. So we’ve made the hard decision to close our TV Ads product over the next few months and move the team to other areas at Google. We’ll be doubling down on video solutions for our clients (like YouTube, AdWords for Video, and ad serving tools for web video publishers). We also see opportunities to help users access web content on their TV screens, through products like Google TV.

The shutdown is clearly a disappointment for Google, yet another sign that its math-driven advertising systems don’t readily translate to traditional advertising. Back in 2009, the company shut down radio and print ad efforts for lack of interest.

Mehrotra’s not being entirely disingenuous when he says that Google’s efforts are better spent on online video advertising. After all, more and more TVs get connected to the Internet and more and more people watch TV shows on their laptops, smartphones, and tablets. With its Google TV project and its fast-growing YouTube video service, Google remains in a prime position to vacuum up ad revenues as big advertisers start to follow their audience onto the Web.

Indeed, YouTube especially has shown considerable traction in attracting new ad spending–$3.6 billion this year, by the reckoning of Citigroup analyst Mark Mahaney. As I wrote in a recent story, YouTube is where Google is placing its television-scale bets:

Now Mehrotra’s goal is to try to grab a big chunk of the $60 billion U.S. television business. But to do that, and fend off TV-content-oriented online rivals such as Hulu, YouTube has to become a bit more like conventional TV. To that end, it organized itself last year into TV-like channels, investing $100 million in cable-quality launches from Ashton Kutcher, Madonna, the Wall Street Journal, and dozens of others. More and more TV advertisers are being won over, says David Cohen, chief media officer at the media buying agency Universal McCann. “They’re getting marketers to think about YouTube as a viable outlet,” he says. 

Mehrotra, who last year became ­YouTube’s vice president of product, envisions millions of online channels disrupting TV, just as cable’s 400 channels disrupted the four broadcast networks. “We want to be the host of that next generation of channels,” he says.

In other words, Google’s strategy is to attack the TV ad business from where it’s strong instead of from where it’s not.

Why Do Programmers Hate Internet Advertising So Much?

Facebook ad question (Photo credit: renaissancechambara)

From my Forbes.com blog The New Persuaders:

Another week, another pontificating programmer slamming online advertising. What is it with these guys?

The latest example is a steaming heap of linkbait from software developer and entrepreneur Patrick Dobson entitled Facebook Should Fire Sheryl Sandberg. That would be the chief operating officer of Facebook, whose purported crime is that she steered Facebook toward being an ad-supported company.

In Dobson’s telling, while Facebook cofounder and CEO Mark Zuckerberg was off at an ashram in India, onetime Google ad exec Sandberg mandated that Facebook would henceforth be an advertising company. Proof of her folly? Facebook’s now worth half of what it was at its IPO three months ago as it “continues to flounder in advertising hell.”

This, despite the fact that Facebook will gross about $5 billion in ad revenues this year, despite the fact that its current market cap is still more than $40 billion less than eight years after the company’s founding in a Harvard dorm.

Thousands of Web developers would love to flounder this badly.

Dobson’s preferred alternative is that Facebook should gradually phase out advertising in favor of–and I have to get technical here, because the bigger picture he provides is fuzzy–selling access to its application programming interface. That way, developers can build businesses like Zynga did on top of the social network in the way personal computer software developers built applications atop Microsoft’s Windows. From his post:

… There is massive value in the social graph and the ability to build applications on top of it. I believe the value is greater than all of the advertising revenue generated on the web to date. … What is the best way to monetize the social graph? To sell access to the social graph! … Developers can then figure out if advertising, or micro transactions, or payed access is the best way to monetize the social graph.

I’m not really sure what “selling access to the social graph” would be, though it sounds like the result could make Facebook’s many privacy gaffes to date look tame.

But the bigger problem is the persistent implication by tech folks like Dobson that advertising is beneath them, and beneath any intelligent human being. Now, I’m no huge fan of most advertising, and all too often it is indeed lame. But there’s no doubt it can be useful at the right place and time, and even when it misses the mark, advertising is a small, remarkably frictionless price to pay for a whole lot of free Web services.

The notion that advertising is evil, to use a favorite term of Google critics, or at least useless is a longstanding meme in Silicon Valley. It goes at least as far back as Google’s founding, before it became–right–the biggest online ad company on the planet. Cofounders Larry Page and Sergey Brin famously wrote in their Stanford doctoral thesis describing Google that advertising could pollute search results.

Why this antipathy to advertising? A lot of tech folks seem to believe they’re immune to the influence of advertising. More than that, they assume that no one else is much influenced by it either (despite ample evidence over many decades that ads do influence people’s attitudes and behavior). Therefore, the reasoning goes, ads are nothing more than an annoyance, an inefficient allocation of capital. Dobson accuses Sandberg of a “rampant lack of business creativity” that has “no place in centers of innovation,” later saying she should start an ad agency in Miami. …

Read the complete post at The New Persuaders.

Here’s How Badly Google Wants To Make Nexus 7 Tablet A Hit

From my Forbes.com blog The New Persuaders:

Only a couple of times has Google deigned to clutter its famously spartan home page with advertising. This is one of those times.

Today, Google is running an ad below its search box for the Nexus 7, the seven-inch tablet that it hopes will steal a march on Apple’s enormously popular iPads. Why now? Google hasn’t said, but it seems likely the ad push is looking ahead to Apple’s expected October release of the seven- to eight-inch iPad Mini, as well as to the expected announcement of Amazon.com’s new Kindle Fire next week.

As tablets take the computing market by storm, Google clearly views them as a critical device on which to make sure its search and other services, and the advertising that rides atop them, continue to be front and center. I remain doubtful about whether Google itself really wants to become a full-on maker of hardware, Motorola Mobility acquisition aside. But at the very least, a successful Nexus 7 could spark other manufacturers to pick up the pace of innovation in tablets.

That’s all the more critical in the wake of Apple’s big win in court last week, when Samsung was found to be infringing multiple Apple patents. Although Google’s underlying Android software was not directly involved, the jury’s ruling cast a pall on Android’s potential for further gains vs. the iPhone and the iPad.

The Nexus 7 spot marks a rare appearance of a Google ad on its home page, though not the first one. The company also ran ads for Motorola’s and Verizon’s Droid phone in 2009, followed by one for Google’s own Nexus One phone a few months later. It also has promoted other Google products, including the T-Mobile G1 phone in 2008. And just a few days ago, if you hovered over the “I’m Feeling Lucky” button, you got alternative messages that sent you to other Google services.

Still, don’t expect to see Google start splattering ads all over its home page. After all, then we’d all stop writing about how unusual it is and Google won’t get the free publicity it’s getting right now.

Don’t Pay Any Attention To Facebook’s Q2 Earnings Report

From my Forbes.com blog The New Persuaders:

To hear almost everyone tell it, Facebook’s earnings results Thursday will be a huge test of whether it will become the blockbuster business success so many investors have bet on. “Facebook Efforts on Advertising Face a Day of Judgment,” intones the New York Times. “Big financial test for Facebook,” blares the dead-tree version of the hometown Mercury News. “There is a lot on the line,” writes the Wall Street Journal.

It’s all a crock. Manufactured journalistic drama. Not that any quarter for such a fast-growing, newly public, highly influential, and closely watched company is unimportant. Of course it’s important. Especially given the underwhelming IPO, investors have a right to information that might tell them if their shares will be heading up or down.

But this won’t be a bellwether for Facebook’s long-term future. Fact is, no one should look to this quarter, or even the next, to determine whether Facebook can fulfill expectations that it will become the next Google.

Why? Because it’s too early. Way too early. Nobody, probably including Facebook, yet knows for sure what kind of advertising and marketing works at large scale in social networking. Facebook is clearly experimenting with a variety of ad formats, such as its socially infused Sponsored Stories. Just as clearly, it’s not apparent that it has found its equivalent of Google’s search ad or television’s 30-second spot. …

Read the complete post at The New Persuaders.

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