The Evolution of Ad Space
http://www.rethink-wireless.com/2014/10/20/q3-google-fumbling-transition-mobile-ads-page2
It is no secret that the rules governing the cyberspace are fickle and giant corporations are dedicating massive manpower and capital to keep up with the trends in order to turn a profit and satisfy their investors. One big issue currently affecting the tech giant Google is the adaptation of their ad revenue protocol to the increasing usability of mobiles for online usage. In fact, it has been found that the average American consumer spends 40 minutes daily on Facebook mobile. The main issue, in a nutshell, is that Google is being less effective than Facebook at convincing investors that it is successfully adapting to the transition from desktops to mobile advertising. The numbers in Google’s quarterly reports don’t deny this; in fact, this was a factor behind a year-on-year drop in net income, down 5.4% to $2.81bn. Moreover, researchers at eMarket further provide confirmation of this shift. Regarding Google’s mobile advertising lead, researchers at eMarket estimate that Google will lose a little share in 2014, ending up down from 52.6% in 2012 to about 50%, while Facebook will leap from 5.4% to about 22% in the same period.
What is the reasoning behind this lull in Google’s seemingly-never-ending growth in both influence and revenue? The answer lies in the technicalities of advertising. For starters, the pixel real estate value on a mobile is, naturally, much more valued than that on a computer because, well, the smallest computer screen is bigger than the biggest smartphone screen. This has produced major headaches for Google because, as expert analysts have discovered, Facebook has done a better job at solving the problem of exposing ads and, ultimately, generating clicks for the advertisers. A main reason Facebook is more effective at this is because of the nature of Facebook’s flagship mobile app, which has over a billion downloads worldwide. The feature that makes it so efficient is the “scroll” set-up of the Facebook app. The newsfeed, in essence, is like a newspaper. You get some stuff you want to read, like updates from friends, and here and there, in-between, you get ads. Another reason Facebook is closing the gap is because it has made great strides in tailoring ads so that they’re user-specific, a feat Google has accomplished so well because of its widespread usage. Users perform essentially all their operations through Google, in one way or another, and so Google has been able to compile this data and make better targeted ads. You think it was a coincidence that you started seeing ads for Nike basketball shoes on your YouTube videos the day after you Googled “Jordan 4 retros”? Think again.
Although Google has been losing some ground as a result of the shift from mobile to desktop, it is unlikely that this enormous corporation will step down from the throne anytime soon.