Some weeks ago here at Mikamai we were considering the advantages of a mobile-first approach to web apps development, in a situation where mobile web browsing is bound to soon surpass desktop browsing.
It turns out that the slowness in the web application market to adapt to the mobile revolution may be threatening even a giant like Google. This might appear surprising, given that Google boasts some of the most mobile-friendly apps and software; a linkedin post reveals the facts behind this apparent paradox.
The largest part of Google revenues comes of course from search ads. In the desktop-dominated web, Google ads worked extremely well: potential customers would throw in a search word for some product and then follow the sponsorized link to the advertiser’s online store.
The same ads don’t have the same effectiveness on smartphones, though, mainly because a large fraction of online stores are still not responsive or even basically mobile-friendly.
The mobile user clicks on the sponsorized link but, finding it difficult to navigate the online store, more often than not renounces to the purchase.
For advertisers, this means a lower conversion rate and consequently a lesser value of customers brought to their store by mobile search ads; it means as well that the price they are willing to pay Google for sponsorizing their links is lower.
The so-called cost per click is indeed declining (-3% in the last quarter of 2014 with respect to the same quarter the year before) and this has been taken as one of the causes of Google stocks plateauing. This is how, paradoxically, Google may be on the way to missing the train of mobile web browsing.
Is there any remedy? Sure, differentiating campaigns and ads for the mobile platform could help; the main problem is, though, that the reason Google ads are less effective on mobile devices is one that is completely out of the hands of Google. Google has to rely upon a slow and uncertain process of modernization of its advertisers. It is all to easy that other players, such as Amazon, would take advantage of the situation while this process is underway.