Google in Mobile Advertising

Google’s mobile advertising business continues to fuel impressive growth for the online search engine pioneer. The company estimates its mobile advertising revenues will likely generate in excess of $2.5 billion a year and growing. Google generates 97 percent of its $34 billion in annual revenue from selling advertising and new CEO Larry Page promises that mobile advertising, including search and social media, will be a prominent part of its growth strategy. During a recent earnings teleconference, Page summarized Google’s approach to the mobile ad market in saying: “Generally, I found that high usage products will make a lot of money over time for well-managed technology companies and that’s why it’s so important to run these businesses for the long-term…That said, we must never lose faith of the fact that today’s revenues and growth serves the engine that funds all of our future innovation.” The engine to which Page refers, no doubt, is advertising.

“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.” Alex Barza, Google

Although Google’s assertive foray into mobile advertising has paid off royally, other technology powerhouses are challenging the company with highly competitive business models. Apple and Facebook promise mobile advertising and pricing strategies, and online audience reaches that rival or exceed Google’s. The year 2012 promises to be a pivotal year in which a few companies could dominate the mobile advertising platform competitive landscape. The challenges for mobile advertising buyers and brand managers are to understand how Google’s strategy differs from the rest so they can effectively spend their budgets and maximize their investment returns.

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