Google exec: Mobile to soon have more targetability than TV, radio or Internet
By Dan Butcher
March 5, 2010
Alex Barza is mobile ads sales lead at Google
NEW YORK – A Google executive revealed the company’s mobile strategy, detailed case studies and discussed the market potential during the keynote address at Mobile Marketing Day, hosted by Mobile Marketer and the Direct Marketing Association.
Google has made tremendous strides in mobile, including mobile search and the development of the Android operating system powering phones such as the Motorola Droid and its own Nexus One. Google’s increasing presence in mobile is reshaping not just the mobile business but also marketing in general.
“We look at mobile as a big part of our overall strategy—that’s an understatement,” said Alex Barza, New York-based mobile ad sales lead at Google. “We’re looking at mobile across the entire world as a global play.”
Two-thirds of the world’s population has a mobile phone subscription—4 billion people—and there will be 5 billion wireless subscribers worldwide by the end of this year, according to some estimates.
Mobile will create the ability to individually target more people than any other channel, according to Google.
“Mobile will soon have more reach than TV, radio or the Internet,” Mr. Barza said. “Mobile is the access point to the Internet in the developing world.
“Search has been our core business for many years now, and we actually receive many more searches on mobile than we do on desktops in developing markets,” he said.
Morgan Stanley recently predicted that more users will access the Internet via mobile devices than desktop PCs within five years.
Market researcher IDC is even more bullish, predicting that this is going to happen sooner than that—by 2013.
“What’s driving this mobile adoption? Computing, connectivity and the cloud,” Mr. Barza said. “What’s different about mobile today than even a couple of years ago is the computing power of these phones.
“Here in the U.S. LTE will potentially be rolled out by the end of the year, and 4G is the equivalent of putting a broadband cable modem in the palm of your hand,” he said. “The cloud is basically the Internet, with more than 700 million servers around the globe, and with smartphones all of that information is in the palm of your hand.
“That’s where we feel the future of mobile is going and where we’ve focused our energies—high-end Web-enabled mobile devices are the future of mobile.”
When Apple rolled out the first iPhone in 2007, it cost $600 and only ran on the Edge network, and was only sold via Apple and AT&T.
Now iPhones are 20 times faster, the operating system is much better and you can buy 16GB iPhones at one-third of the price at Walmart or Best Buy Mobile.
Consumers can now get an iPhone or Motorola Droid for $199 or so.
“If you think about how far we’ve come as far as access to these Web-enabled devices, it’s pretty incredible,” Mr. Barza said.”Bigger screens, more connectivity and faster processors are enabling us to do a lot more.”
As an example of convergence in action, Mr. Barza cited Google goggles.
“Google goggles leverages the unique attributes of the mobile phone, which is much more personal than a desktop, much more interactive than the desktop Web experience,” Mr. Barza said. “It leverages sight through the camera, GPS makes it location aware, the cloud gives it access to vast amounts of data and you have connectivity within seconds.
“I point my Nexus One out my hotel window in Chicago and within milliseconds there’s an augmented reality interaction telling me ‘You’re looking at the Chicago Watertower,’” he said. “There’s also optical character recognition, so when you’re reading a menu or document in a different language, it can translate that into 100-plus languages.”
One of the audience members commented that the mobile technology Google sees on the horizon is like something out of Star Trek.
“If you’re texting in English, Google will translate it in real time, so you can have a dialogue with someone who doesn’t speak English, and we’ve applied that to a conversation, so if I’m speaking in English, the phone will pick that up and translate my voice and spit it back out in over 100 languages,” Mr. Barza said. “We’re not quite there yet, but we will be soon.”
New devices = new usage
Google tracks mobile searches on Google.com within the shopping category.
The three-year graph, from May 2007 when the original iPhone launched to January 2010 when Google’s HTC Nexus One debuted, showed tremendous growth in the shopping category.
IDC forecasted that by 2013, there will be more than 1 billion mobile devices that can connect to the Internet. That does not just include phones, but also gaming consoles, netbooks, eBook readers, GPS systems and car navigation systems, iPads and tablets.
Mobile commerce has arrived
People are showing their willingness to buy goods and services via their handsets, and not just ringtones and wallpapers, but everything from books, movies and music to tickets, flatscreen TVs, fashion apparel and even cars.
“I was blown away that someone bought an actual Corvette on eBay mobile for $75,000,” Mr. Barza said. “A lot of clients across the board are starting to experience sales from mobile devices and are seeing incremental growth of users accessing their Web site from mobile devices, which is leading to sales.
“Consumers want this—they want the stuff that they want when they want it, and mobile enables them to buy it now,” he said. “Having a mobile-optimized site aids that process, because it provides better customer service, but there are some sales happening via mobile on non-optimized sites.
“There will be Flash on all Android devices later this year, with pinch and zoom and fast connectivity.”
Retailers are seeing more conversions at a lower cost using mobile channels.
A Google mobile advertising case study run with Razorfish tested alternate landing pages and found the best results with a page that included the nearest store locations.
The company tested mobile-specific variations in ad copy and found the best results with ads that mentioned the iPhone.
The mobile campaign was 7.5 percent more efficient on a cost-per-conversion basis compared to desktop campaigns. There were close to 10 percent more conversions with mobile-specified text.
“Some retailers are seeing similar average order values on mobile as they are on desktops,” Mr. Barza said. “Conversion rates are similar on mobile as they are on desktops, and Best Buy said at a recent conference it is seeing better conversions on mobile than via desktops.
“It’s a trend we’re also seeing across some retailers,” he said.
The impact of mobile on retail is already being felt in a big way.
Red Laser has been one of the top 5 paid applications in the App Store, ShopSavvy became the top free application in Android Market and Google Shopper launched this year.
Deloitte found that one in five shoppers intend to use their mobile phone while shopping in store this season.
“We can measure mobile commerce conversions, but it's also important to understand how retailers can assign value to conversions,” Mr. Barza said. “We should assign a different value to consumers who are in stores using their phone to look up pricing information.
“Those are challenges we have to think through,” he said.
Google’s mobile strategy
The foundation of Google’s mobile strategy is location, mobile search and computing in the cloud. In addition, going forward all of its software will be compatible with both mobile and desktop environments.
Current examples include Google Docs, Photos, YouTube, Gmail, Maps, Voice, Latitude, News, Calendar, Shopper, Google.com, My Location, Search application and Voice Search, as well as the newly launched Buzz.
“We want to make these accessible anywhere they’re located to create a seamless experience from desktop to mobile no matter where you are or what device you’re using,” Mr. Barza said. “Mobile is taking a major priority within the company.”
The key is taking advantage of the opportunities that cloud computing opens up.
“What Google has done, we’re leveraging all of the connectivity and power of the cloud, and it starts with the location of phone, which knows where you’ve been, it know where you are and, in the future, it may even predict where you’re going,” Mr. Barza said.
“Search is the core of our company,” he said. “We want to make it extremely easy to perform mobile searches on the go leveraging each user’s location.
“We have search apps available on a series of phones, and we’re leveraging the voice capability on phones so users can speak a search, text message or email.”
Google proved with the pending $750 million acquisition of AdMob that mobile advertising is a very important priority for the company. As expected, Mr. Barza could not directly comment on the deal till it was signed off by the regulatory authorities.
“Our mobile advertising strategy is that we want to connect with people when they are using their mobile device, whether they are searching, browsing the Internet, watching video or using apps,” Mr. Barza said.
The local explosion
One out of every three search queries on mobile have local intent, according to Google.
“We have Google Mobile Maps as the base layer, and we’re adding other layers of data particular to a specific user's interests,” Mr. Barza said.
Users can find locations, click to call, get the address, show the location on a map, get walking, driving or public transportation directions, including navigation with street views.
A new feature of the Nexus One’s Android 2.1 operating system is GPS turn-by-turn directions with voice.
Meanwhile, click-to-call phone numbers in mobile ads saw a 5-30 percent increase in click-through rates.
“It has worked well for small and large businesses,” Mr. Barza said. “The calls these advertisers received came from both actual search ads and from landing pages, so I recommend you have a phone number prominently displayed on your Web site.”
Analysts estimate that more than 3 billion mobile applications have been downloaded across several application stores iTunes, Android Market and BlackBerry AppWorld.
Google is serving ads within iPhone and Android applications representing millions of daily impressions.
In-application banner ads and search ads enable a consumer to download an application with two clicks or taps.
Google also serves mobile ads tallying millions of daily impressions within YouTube, which is preinstalled on Android devices.
“The feedback we get from advertisers is that after an app is released initially, the buzz tapers down, and it’s tough to stand out in sea of apps,” Mr. Barza said. “We’re leveraging our ads in applications and mobile search to enable advertisers to promote their applications, giving them the ability to serve an ad that lets users download an app in two clicks.
“It helps discoverability and extends the investment they’ve made in app development,” he said.
Related content: Search, Google, Alex Barza, Direct Marketing Association, Mobile Marketing Day, AdMob, mobile applications, Nexus One, Motorola Droid, mobile search, mobile marketing, mobile advertising, mobile
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