Google plots display advertising, mobile push

25 January 2010

MOUNTAIN VIEW: Google is seeking to heighten its emphasis on display advertising, mobile and making its products more "social", in an effort to drive growth beyond the search market.

The company posted a 17% uptick in revenues during the final quarter of last year, to $6.7 billion (€4.7bn; £4.1bn), while its profits stood at $1.97bn.

Eric Schmidt, its ceo, said the web pioneer made 550 "enhancements" to its search system last year, and 60 "quality improvements" to its display service.

"Beyond search and search ads I think we see a few major trends that are transforming the internet, and I think we are in a great position to compete in those areas too. The first is social," he added.

"When you say 'social', I think people think of social networks, but really we believe the entire web is social. So we are going to look at making all of our products more social."

Having signed a deal with Twitter, the microblogging service, to feature "tweets" in its search results, Schmidt suggested the next step could be tailoring information to suit individual users.

"We think you are more likely to trust a restaurant or a movie review from a friend of yours than from a stranger. So maybe it should be rated as a higher quality result, but only for you," he commented.

With regard to advertising, Google has previously outlined its intention to focus on display, a market it values at around $17bn at present.

"The second big trend we are seeing is brand marketers continue to better understand the online display format and incorporate that into their campaigns," said Schmidt.

Fox, for example, promoted its film Avatar via a dedicated channel on YouTube, the video-sharing portal, which included flash ads and a high-definition trailer for the movie.

American Express and Sony also used this platform to host and stream a concert held by the singer Alicia Keys linked to World Aids Day, drawing web users from 167 countries worldwide.

"What I can say is the big shift we are continuing to see on YouTube is that it has gone from being a 'nice-to-have' to an essential part of the media mix of any display campaign that our advertisers are planning," Schmidt concluded.
Mobile is also attracting a greater degree of interest from Google, as demonstrated by its recent acquisition of AdMob, the ad network, and the recent launch of its Nexus One smartphone.

"We have a lot of evidence that people are moving to these data-friendly mobile devices very, very, very quickly," said Schmidt.

"For lots of reasons 2010 will be a year of significant mobile revenue growth for the whole industry. I am sure we will be able to play a major part of that."

The rising popularity of Android, Google's mobile operating system, has also delivered a five-fold increase in the number of search enquiries submitted via this channel in the last two years.

"Our [mobile] search traffic growth rate is quite a bit faster than on PCs. We expect that to continue," Schmidt reported.

Jonathan Rosenberg, svp, product marketing and management, added that "personalisation is also getting more important and we think mobile is a big part of that."

"With all the capabilities these phones that are coming out have – like GPS, cameras – we think there is the potential to actually make the mobile web better than the PC web."

AT&T is one firm that has used this medium to help direct mobile owners to its stores in their area, while brands offering coupons in such a way have al

Data sourced from Seeking Alpha; additional content by Warc staff