With More App Browsing, Google Must ‘Search’ For Its New Role In Advertising

March 10, 2014 - Written By Cory McNutt

Google has built its fortune from the advertising revenues it receives when we do searches from our web browser on our PCs or laptops – you search for something and bingo, up pops ads that you can click on to go to that other website. Google can even recommend ads for you based on your previous searches or browser visits through the use of ‘spiders’ – oh how I hate spiders and so they are appropriately named – or branches that travel all over the internet.  This ‘spider network’ of sophisticated algorithms help rank the value of advertising pages and helped Google amass its $50 billion advertising industry.

As much as Google has helped proliferate the mobile world with its Android OS, it is also threatening their advertising empire as more and more users are turning to a tablet and smartphone when doing their searches. If the user went to the browser on their mobile device and did their search, that would still accomplish Google’s advertising mission. The problem is that users are spending 80-percent of their time within Apps on their devices, where Google cannot so easily use their ‘spidering.’  This means that mobile users are actually in a browser 20-percent or less of their time. Simon Khalaf, Flurry’s chief executive of the mobile-analytic firm, says:

“Search is the gateway to information on the Web, but that is not the case in mobile. When people turn on their phones, they are clicking on apps, not going to the browser and typing google.com.”

Because of this, Google is looking into a technology called “Deep Linking,” which is also used by Facebook, Twitter, and others.  It assigns a mobile app their own web address so it appears as though you are clicking on a web link, but it actually takes you inside an app rather than a web page.  Google is not yet selling ads to appear beside the links, but John Milinovich, founder of mobile-ad firm URX believes that deep linking ‘Adwords,’ Google’s main advertising product, will be “huge.” While Google would make no commitment on when it would start selling advertising with deep links, Nikesh Arora, Google’s chief business officer, said that right now mobile ads are less lucrative than desktop ads, but in the long-term, mobile advertising would eventually far surpass desktop advertising due to the extra information that a smartphone can capture about the user.  Couple that with the fact that App Developers want to promote their apps so that users will continue to return to them – currently, after being downloaded, more than 60-percent of the apps are opened 10 times or fewer!

Facebook is further along than Google when it comes to deep link advertising after launching their version in October 2012. After only a year, Facebook claims that the ads have driven over 145 million app installations.  Besides encouraging downloads, in October 2013 it launched “mobile app ads for engagement” that allows App Developers to buy a deep link that will point back to apps the users already have installed. Google will certainly adapt to the new deep links – $50 billion is just too much not to persuade them in the near future.  Like Google’s Nikesh Arora said, at the moment mobile is less lucrative than desktop, but all of that will slowly change…and you can be sure that Google will be changing right along with the industry it pioneered.