One of the themes that came up repeatedly during the conference call for Google's second quarter earnings was mobile advertising. Analysts asked a number of questions that, collectively, seemed to be gauging what the shift to mobile means for Google's advertising business.
Senior Vice President and Chief Business Officer Nikesh Arora (pictured) offered some numbers at the beginning of the call, saying that with AdMob integrated into AdWords, 1 million AdWords advertisers have access to the 300,000 mobile apps in the AdMob network. When asked specifically about mobile cost-per-click rates, Arora didn't get too specific, but he said they're "healthy."
"The good news is, we're seeing phenomenal growth in mobile queries across the board," Arora said. "Mobile is right now where search was in 1999."
He pointed out that Google has been unveiling a number of ad innovations that are specific to mobile, like a click-to-call option (which generates 15 million calls every month). As that continues, we can expect to see mobile ad pricing to rise, similar to the trajectory of search ads.
Google's overall CPC rates were actually down 16 percent compared to the same period last year, and Arora acknowledged that the drop was partly because mobile and tablet ads made up a bigger part of the mix. He cited other factors too, such as the mix of developed and emerging markets, and he argued that while CPC is "an important metric for us" it doesn't necessarily reflect "the fundamental health of our business."
Another question wasn't directly about ads, but it addressed some of the same issues: As mobile searches grow, are they taking away from desktop searches? Senior Vice President of Ads Susan Wojcicki cautioned that it's a complicated issue that Google is still analyzing (especially when it comes to tablets), but she said, "We believe that mobile searches are mostly incremental." She noted that smartphones and tablets are mostly used on-the-go, so Google's hope, at least, is that they're just leading to a bunch of new searches, rather than replacing the ones you would've done on your desktop.
Google provides search and advertising services, which together aim to organize and monetize the world's information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company's extension into the social space. Most of its Web-based products are free, funded by Google's highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...
Nikesh Arora is the President of Global Sales Operations and Business Development at Google, where he oversees all revenue and customer operations, as well as marketing and partnerships. Since joining Google in 2004, he has held several positions with the company. Most recently, he led Google’s global direct sales operations. He also developed and managed the company’s operations in the European, Middle Eastern and African markets and was responsible for creating and expanding strategic partnerships in those regions for...
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