Fast Company

Google Predicts Mobile Ad Rates Will Top PC Ad Rates, Will Make Bank Either Way

Nexus One

In a briefing, Google Engineering Vice President Vic Gundotra sounded off on the importance of mobile to Google's future success, saying "Google has bet big on mobile." And when Google bets big, you can bet advertisements are somehow involved.

Ad rates for mobiles are still far less per click than on a full PC, and the total revenues of these different ad streams backs that up (check out our infographic for an overview of ad revenues). But mobile ad rates are skyrocketing, thanks to dramatically increased popularity and capability of mobile devices: Apple's iPhone, BlackBerry, and Google's own Android are leading the way with smartphones that are less related to cell phones than they are to full-blown pocket computers.

And users are taking advantage of these smartphones by performing tasks traditionally restricted to computers, including search, Google's bread and butter. In fact, Google has seen mobile searches multiplied fivefold in the last two years, largely due to the public embrace of smartphones. And Gundotra doesn't see that pace slackening: with advanced capabilities like GPS that can be used for more targeted user-specific ads, Gundotra says, regarding that cost-per-click number, "We hope and believe that there's even a chance that we could exceed desktop in the future."

Given Google's recent purchase of AdMob, Google isn't bluffing when they call themselves a "mobile first" company. AdMob, provided the purchase is permitted by the FTC, will give Google a huge step up in mobile ads against competitors like Apple and, possibly, Microsoft. Combined, Google and AdMob control about 21% of the mobile ad market--and as mobile gets ever more popular, that'll mean a pretty incredible amount of bank.

[Via Reuters]

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