Google eyes mobile future

01 March 2011

PALM SPRINGS: Marketers will be presented with a huge range of opportunities in the "mobile first" era that is resulting from increased smartphone use, Eric Schmidt, Google's chairman/ceo, has argued.

Schmidt was speaking at the Interactive Advertising Bureau's annual leadership meeting, covered in more detail by Geoffrey Precourt, Warc's US editor, here.

"The smartphone is the iconic device of our time," he said at the event.

Having projected in 2010 that mobile usage would surpass the PC equivalent in two years, Schmidt revealed this shift had actually already beaten such a schedule.

"It happened two weeks ago. And the PC is not going to catch up," he said.

Indeed, Schmidt stated the uptake of mobile media is "happening faster than all our internal predictions", shown by the fact 78% of mobile web users already utilise their handsets while shopping.

Further data directly linked to advertising demonstrated the power of what Schmidt described as the "mobile first" age.

Chrysler, the automaker, ran a 60-second TV spot during the recent Super Bowl, and related mobile search traffic climbed 200% after the commercial aired, measured against a 48% leap on desktop PC.

These figures hit 315% and 50% respectively regarding GoDaddy's execution made for the same event.

Perhaps the greatest potential of this medium, however, is to provide highly localised marketing and communications.

"A RadioShack ad can tell you where you are and how to get to the nearest store," Schmidt said.

Once consumers have been tempted into branches, retailers can also create barcodes to be scanned using wireless devices, and allow buyers to obtain products through contactless payments.

Permission-based services are an essential tool, and Schmidt also suggested targeted deals should prove especially attractive to shoppers.

"Let's say you need a pair of pants. [Your smartphone] tells you there's a store on your left with a 20% discount," Schmidt added.

"The store on your right has a 30% discount, but it's for a brand you don't like. The phone can, in fact, tell you what to buy. And, again, it's tap-and-pay and off you go."

"Think of the offers mechanisms for advertisers ... We've spent 20 years trying to get here. And now there's an explosion in commerce."

Elsewhere, he estimated internet ad revenues currently stand at $62bn (€45bn; £38bn) worldwide, including $26bn from the US alone.

Turning specifically to online display, Schmidt valued the global market at $17bn, incorporating $9bn generated by American advertisers.

Looking ahead, Google's chairman forecast the display category could deliver $200bn in returns "within the next five to ten years".

The largest obstacle constraining this expansion, and possibly even more rapid growth, is a simple, logistical one.

"It's too hard to get campaigns up," said Schmidt.

The advent of systems like trading desks supplying instant access to inventory, and constantly updated prices, may change such a situation.

"The new online advertising model is real time," said Schmidt."“It's iterative. You don't press the button and see what happens in the week; it occurs literally live."

Overall, Schmidt suggested that, just as the term "colour television" was quickly replaced by just "television" when viewers got used to the new technology, a parallel shift is soon set to take place.

"Today we speak of digital media. The average American spends about a third of their media time online and kids are always online."

"All media will be digital media … All this will happen within all of our lifetimes."

Data sourced from Warc