Google could make $5 billion from tablet search revenue alone

Marin Software, one of the top companies who help advertisers buy web-search ads, is predicting that Google could make up to, and beyond, $5 billion from tablet web searches alone in 2013. Last week, Google changed their AdWords rules forcing advertisers to pay for tablets reached, even if they only want PC users. The analysis comes as Google desperately tries to boost ad revenue on mobile devices, especially tablets. 

Google has also said that the effectiveness of search ads on tablets - the rate at which an ad click achieved a sale, or some other advertising objective - rose 31% in 2012, with conversion rates equaling desktops PCs by the end of 2013. Marin Software predicts that the conversion rate for tablets is 3.3% vs 3.9% for PCs. Marin also predicted that advertisers would spend more on tablet users than on smartphone users - if that isn't already the case - and that Google will equalise the ad prices by the end of the year. Currently, a click on a tablet costs 17% less than a PC. 

In an interview with the WSJ, Marin's chief marketing officer, Matt Lawson, said: "Either tablets have overperformed or smartphones have under performed." A click from a smartphone is less likely to result in a sale, Marin found. This is something Google, and numerous other technology companies such as Yahoo! and Microsoft, are working on.  

Marin reports that 20% of Google's total ad clicks will come from tablets in 2013, up 10.7% over 2012. These numbers are down to the massive popularity of devices such as the iPad, Nexus 7 and Kindle Fire, especially in Western markets. 

Bing, Google's closest competitor, has a much smaller presence on mobile than on desktops. This monopolisation of mobile search will help Google justify their high prices for mobile ad clicks, and will help compensate for the large - possibly $1 billion - sum they pay to Apple. 

Marin's report is based on numbers from Macy’s, Gap and the University of Phoenix who collectively spend $4 billion on search ads per year. 

In 2012, Google generated around $40 billion from ad revenue. 

Source: WSJ

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14 Comments

How would you describe a method of advertising that you would find tolerable and effective? Or what alternative way to monetize the platform would you suggest?

Joshie said,
How would you describe a method of advertising that you would find tolerable and effective? Or what alternative way to monetize the platform would you suggest?

Advertising that doesnt cover up parts of the screen I need to click on or see. If they were not so damn intrusive, I wouldnt mind. Like the adverts where after you complete a level in a game, the following screen is a full ad. They do not show up when you are playing the game. Or offer me a payed version of the app.

A top priority of any ad delivery system is going to be meaningful attention from viewers, so you need to describe a type of 'intrusive' that isn't offensive to you. You aren't going to have a world where ads sit quietly off in a corner where they're easily ignored, and you aren't going to have a world where ads work when they rely on people who feel like "rewarding" a site/app by clicking their ads with no intention of buying the service of the advertiser.

Ads are going to happen one way or another. Even if more apps go with a pay model, web sites will continue to rely on ad revenue because pay walls on the web are a horrible user experience. Ads are going to find a way to get your attention one way or another, and ads are going to find ways to be as relevant to the individual as possible one way or another.

The challenge of the internet is finding a way to make people passively accept giving total attention to advertisements the way they do for television, and efforts to remove, block, and skip over sponsor content will always be met with resistance and will never ultimately 'win'.

Don't forget advertisement banners that take up 50% of the screen and force you to scroll down to read the content you come to see. (neowins banner is a great example of one to hate) If it was on the bottom, I wouldn't care.

Also apps allow an ad-free experience for 99c, I am sure a site could work that way too, I mean neowin has the subscriber tiers. But I'll just wait for websites to cost me $1 per site to not deal with that ****.

Joshie said,
A top priority of any ad delivery system is going to be meaningful attention from viewers, so you need to describe a type of 'intrusive' that isn't offensive to you. You aren't going to have a world where ads sit quietly off in a corner where they're easily ignored, and you aren't going to have a world where ads work when they rely on people who feel like "rewarding" a site/app by clicking their ads with no intention of buying the service of the advertiser.

Ads are going to happen one way or another. Even if more apps go with a pay model, web sites will continue to rely on ad revenue because pay walls on the web are a horrible user experience. Ads are going to find a way to get your attention one way or another, and ads are going to find ways to be as relevant to the individual as possible one way or another.

The challenge of the internet is finding a way to make people passively accept giving total attention to advertisements the way they do for television, and efforts to remove, block, and skip over sponsor content will always be met with resistance and will never ultimately 'win'.

I pay for software that I find good, if a website can't find some way to make money other than showing useless ads that I NEVER CLICK ON then that's their problem not mine. Showing annoying ads = me not coming to that website again. I block ads in my browser and use the hosts file effectively to block ads from even downloading. Ads are not ever going to 'ultimately win', the more intrusive they become the more likely legislation will come down blocking tracking and the privacy invasion this malware marketing has become.

dead.cell said,
Cool, so they can spend the $1 billion to keep Bing off iOS by default.

Hey look, it's that guy who eats, drinks, sleeps, and bathes with his hatred of a product. I bet he can't name a single search where the correct result is in Google's top ten but not Bing's.

Joshie said,

Hey look, it's that guy who eats, drinks, sleeps, and bathes with his hatred of a product. I bet he can't name a single search where the correct result is in Google's top ten but not Bing's.

What are you talking about? Butthurt so bad, you probably didn't even realize I actually use Bing. http://i.imgur.com/DD14zTp.png (my rewards)

Was just saying they could afford it if they wanted too, given the recent speculation.

In 2012, Google generated around $40 billion from ad revenue.

What's the rest of Google's profit from? Is it increasing from other sources like the app store?

Silver47 said,

What's the rest of Google's profit from? Is it increasing from other sources like the app store?

Google makes around 95% of its money from the scummy practice of advertising/spamming/graffiti the web with useless text and banners.

pgxl said,

Google makes around 95% of its money from the scummy practice of advertising/spamming/graffiti the web with useless text and banners.

here we go...

M$ made 100% of their money by abusing their monopoly to force users to pay through their nose for buggy, half a$$ed, malware magnet software.

See how easy that was?

Google's success is fine by me as long as they keep passing it on to the consumer in the form of easily accessible quality software, which they do, and easily accessible quality hardware, which they do.

Keep the $200 quad core tablets comin' google and keep on improving your cloud based solutions and you deserve all the success

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