Webpage Ad Slots in Mobile Advertising: Quality over Quantity?
Google is the second-most visited webpage in the world, so any advertiser will agree with the argument that paying for ads on Google would be beneficial, as nearly every internet user worldwide has the chance to view and click on the advertisement. As a result, we should expect Google’s cost per click (the amount Google charges an advertiser each time a user clicks on the advertiser’s promoted ad) to be rather high, as an ad slot on a website viewed as often as Google is desirable to advertisers. This is all logical so far, but N. Madhavan points out a trend contrary to what these facts suggest: Google’s cost average per click has decreased by nearly 15%.
Madhavan attributes this statistic primarily to the fact that Google’s relatively new prowess in mobile advertising, or advertising via wireless phones, generally has lower costs per click. However, he cites another possible reason for Google’s dropping prices – Facebook’s increasing popularity among advertisers in the mobile market. This popularity is due mainly to the Facebook log-ins that most wireless apps now allow; using this information, Facebook will be able to glean much more knowledge about its mobile users. Madhavan puts this development simply: “In an emerging mobile world, Facebook-linked ads may get a leg-up on the strength of user data linked to apps, while Google ads may get discounted in small screens.”
Advertisement Journal argues that although Google’s cost per click has decreased, Google’s number of clients is still increasing, so we must be cautious when reading Madhavan’s article and in declaring Facebook’s increasing desirability among advertisers. However, when we apply a matching market to this situation, it turns out Madhavan’s claims are strong. A matching market matches advertisers to ad slots, utilizing market-clearing prices to set up a perfect matching situation. Market-clearing prices generally fall such that the most desirable ad slots may charge the highest costs per click. Facebook’s costs per click are increasing, and this supports the theory that Facebook’s desirability may soon surpass Google’s. So in this situation, we see a trend that holds in so many circumstances: it’s not quantity that matters most, it’s quality.
Sources:
“Google.” Wikipedia. Wikimedia Foundation, 27 Oct. 2012. Web. 28 Oct. 2012. <http://en.wikipedia.org/wiki/Google>.
“Google Runs Ads 30 Billion Times Per Day.” Advertisement Journal (2012): n. pag. Web. 28 Oct. 2012. <http://www.advertisementjournal.com/2012/10/google-runs-ads-30-billion-times-per-day/>.
Madhavan, M. “Facebook Rises, Google Edgy in Digital Advertisement War.” Hindustan Times. N.p., 21 Oct. 2012. Web. 28 Oct. 2012. <http://www.hindustantimes.com/News-Feed/NMadhavan/Facebook-rises-Google-edgy-in-digital-advertisement-war/Article1-948170.aspx>.
“Mobile Advertising.” Wikipedia. Wikimedia Foundation, 10 Nov. 2012. Web. 28 Oct. 2012. <http://en.wikipedia.org/wiki/Mobile_advertising>.
-pbs62
great for me.
great for me
I think Google is doing well because its a nice idea to do advertising at low rate.