Understanding Google’s mobile ambitions and what it means for marketing's future
By Giselle Tsirulnik
November 14, 2011
When it comes to mobile, Google definitely has a 360-degree surround strategy in the space, with a presence in mobile marketing, commerce, content, hardware and software.
So what exactly is Google trying to do in mobile? And what does it mean for all of use marketers?
“Google’s mission to organize the world’s information and make it accessible underlies their leadership in mobile,” said Calynn Krieger, East Coast mobile account director at AKQA
, New York. “There is no denying the importance of mobile to be able to access information anytime and anywhere.
“To choose to not make certain products available or accessible on mobile would be the opposite of their mission,” she said. “Google has done a great job of evangelizing mobile and putting smartphones in hands.
“Their strategy has done a lot to push the entire mobile industry forward.”
Google did not comment in time for press.
Google generates 97 percent of its $34 billion in annual revenue from selling advertising. These ads take the form of small clickable text links displayed in conjunction with search results.
On Oct. 13, Google reported mobile ad revenues up 250 percent in the last 12 months to a $2.5 billion run rate.
“It is logical to assume that Google will keep extending their incredibly successful model into the mobile space, and offer ways for their retail advertisers to link performance-based mobile search and banner ad campaigns to traffic and conversions, via mobile commerce sites,” said Wilson Kerr, director of business development and sales at Unbound Commerce
“Simply put, Google cannot sell an effective mobile ad campaign that links to a non-mobile optimized site,” he said.
When it comes to mobile marketing, Google has made its position clear – mobile Web over apps.
The company’s recent launch of http://howtogomo.com further cements this notion of Google trying to position itself as the leader of the mobile Web.
“In my opinion, mobile commerce is the space that offers Google the most upside,” Mr. Kerr said. “If Google can deliver mobile campaigns to mobile consumers when and where they are most likely to act, and link campaign success metrics to proven, incremental mobile commerce sales, they are touching a potential goldmine.”
Android devices are outselling Apple's iPhone, according to Nielsen.
The open operating system now has 43 percent penetration, compared to 28 percent for Apple's iOS.
Android’s share of mobile app downloads was 44 percent during the second quarter while iOS had a market share of 31 percent, according to ABI Research.
Contributing factors to Android’s strength in the second quarter include its open-source strategy and slowing demand for iPhones during this period.
The fact that Android is an open platform has expanded the operating system's install base. Android is available via multiple carriers and on various handsets, unlike the iPhone.
Google is pushing the mobile commerce industry ahead.
Every time the company releases a new product or innovation, it makes news and creates interest.
For example, the launch of Google Wallet brought attention to the mobile payments industry and has already gained momentum for its service offering.
Google Wallet has paved the way for cross-carrier agreements like ISIS that might not have otherwise reached fruition.
Rob von Behren and Jonathan Wall, founding engineers on Google Wallet, introduce the app that makes your phone your wallet.
According to the company, Google Wallet is part of Google’s commitment to an open commerce ecosystem.
“Our goal is to increase the pace of innovation for consumers and merchants alike,” said Google when it first launched Google Wallet. “We envision a marketplace for payment instruments, commerce and loyalty services, and point of sale equipment compatible with Google Wallet.
“We believe that consumer and merchant choice will facilitate the growth and adoption of the next generation of commerce and payments technologies,” the company said.
Google Wallet’s support for coupons and loyalty could boost retailers’ programs.
“Google is very smart and can afford to throw a lot of spaghetti against the metaphorical mobile commerce wall,” Mr. Kerr said. “They test early and often and use these learnings to roll out popular tools that unobtrusively feed the Google ad machine.
“In my opinion, Google wins by probing for areas of potential growth early and then watching and learning, before wading in,” he said. “For example, Google was testing concepts like mobile proof of presence check-ins by mailing door sticker QR codes to 200,000 merchant advertisers in December 2009.
“As QR codes finally gain traction, you can imagine how much empirical 'retailer-involved' knowledge they already have.”
Most brands and retailers already advertise with Google.
The fact that this acquisition funnel is already overflowing, is the company’s biggest advantage, Mr. Kerr said.
Google reported recently that 79 percent of retailers who advertise with Google do not yet have a mobile-optimized site. This is while 78 percent of consumers surveyed prefer a mobile optimized site to a mobile app.
“When you throw Google Wallet into the mix, it’s not hard to envision a fully intact ecosystem of Google offerings with location-based mobile ads driving tracked incremental revenue via etail integrated mobile commerce, or via sales that are picked up in-store, via mobile payment,” Mr. Kerr said.
“Now toss in Google Offers, NFC and QR codes for trigger point marketing, and the fact that Google already has the accounts open and the pot gets even richer,” he said.