“Mobile clicks monetize at about 50 percent of traditional clicks,” said BGC Financial analyst Colin Gillis.
The reason is that mobile ads simply don’t engage users at the rate their desktop cousins do. Which makes sense: When you’re banging out a Google search on your smartphone, you’re more likely on the go and more likely to need to do something with that information. The leisure to tap an ad that captures your eye isn’t there.
Mobile was the first thing on Google CEO Larry Page’s mind on the earnings call with investment analysts Thursday. Page said many of us have one kind of screen or another in front of us or with us all the time. Switching among these screens, he said, has become the norm. And he said Google was “super well placed” to adapt its business model to this change in behavior.
Larry Page said 500 million people are now carrying Android phones and said Google is on pace to bring in $8 billion annually from mobile, though the figure included not just ads but also includes music, videos, and apps sold in the company’s online store.
Gartner says mobile ads generated close to $3.3 billion worldwide in 2011 and projects they will top $20 billion annually by the end of 2015.
Global internet advertising expenditures will rise about 31.5% between 2011 and 2013, according to a July 2011 forecast from Zenith Optimedia. Internet ad spending is expected to total about $72.18 billion USD this year, and reach $94.97 billion in 2013.
On the call, Google executives also extolled another effort that could one day lead to a much bigger pot of advertising gold. While Google’s ultra-high-speed Google Fiber network has only rolled out in one city so far, the prospect that Google could some day master television — still the biggest magnet for ad money — could eventually drown out concern over mobile.
Clearwire’s 40 MHz bandwidth will support peak speeds of 168 Mbps, twice as fast as anything Verizon, AT&T, Sprint and T-Mobile can throw it, according to John Saw, CTO of Clearwire.
LTE Advanced supports 8×8 MIMO downlink antennas. With a 40 MHz pipe, each sector might support 600 Mbps, or 30 subscribers streaming at 20 Mbps (times 3 sectors) – that’s wireless cable. Multi-casting might transmit a base of 6-8 local channels at little or low cost. Fiber to the home would be unnecessary.