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.