Mobile is going bananas: The CPC advertisers pay Google each time someone clicks on an ad, decreased 6 percent from the fourth quarter a year ago, falling for the fifth consecutive quarter on a yearly basis. Why? Mobile traffic is increasing. Since, conversion rate on mobile devices is lower, advertisers must decrease spend in order to meet their original CPA goals. This results to an overall decrease in CPC. See charts below.
Google’s Response: “We’re in some uncharted territory because of the rapid rate of change in these things, but I’m very optimistic about it,” said Larry Page, Google’s chief executive, on a conference call with analysts after the earnings were announced. “I think the C.P.C.’s will improve as the devices improve, as well.”
Can the rise of mobile apps lead to the destruction of search and Google?
As mobile usage continues to increase, so is the use of mobile applications. Since consumers are increasingly using apps, like Yelp, Amazon, Target or Kayak, to search on mobile devices, will searches on Google decrease? Since, a lot of Google revenue comes from branded advertisement, what happens when retailers develop their own app? Once the consumer downloads the Target app, they don’t need to do a search on Google to find Target, the app is already installed on their phone… right? In retrospect, why haven’t searchers embraced bookmarking Target in their web browser instead of searching on Google every time they want to go to Target.com? If users still prefer the Google search over bookmarking, then how can we assume that mobile applications will share any different of a fate?
As more and more websites are converted to RWD – responsive web design – optimized for mobile devices, the incentive to download apps becomes less. People download apps because apps make content easy to consume and navigate on a mobile device. If an RWD site is just as easy to navigate on a mobile device as on an app, then why would someone download an app?
As it stands, in 2012, 64% of mobile phone time was spent on apps. Even at 64% penetration, app usage doesn’t seem to influencing mobile searches on Google. Another reason why I don’t see individual apps replacing Google is because mobile apps require people to do extra work, opening one app to search for flights and another to find restaurants. Google is the one-stop shop, and still the easiest and most accurate source to locate the content you are looking for.