As the FTC lays the groundwork for a possible challenge to Google’s purchase of AdMob, it is instructive to look at something else Google has already done to gain a strong foothold in the mobile ad business.
Any advertiser that bids through the AdWords system gives Google complete authority over which devices its messages are seen on – that is, unless the advertiser makes a specific election not to appear on mobile handsets. The ads might run alongside search results on a PC or a laptop, or they might appear on a smartphone like the iPhone.
Most users normally accept the default settings on systems like AdWords and never make changes. So it’s a fair bet that this policy has given Google a massive inventory of ads to push onto mobiles. That sounds great for Google, but whether it is always in the best interests of the advertisers is a different question.
One advertiser who is less than happy is Simon Buckingham, a mobile entrepreneur whose interests include Ringtones.com and GPS tracking service Zoombak. He says he only recently realised that some of the ads he buys through AdWords land on smartphones, and claims these are far less effective for his companies than those that end up on full-sized screens (full disclosure: Buckingham has also emerged as a vociferous opponent of the AdMob deal, as seen from his Appitalism blog.)
Google CEO Eric Schmidt has talked a lot recently about the power of mobile ads, evidenced in the high click-through rates they receive. But it’s impossible to tell how valuable these clicks are to the advertisers who pay for them.
The problem, as Buckingham describes it, is twofold. The landing pages that advertisers design for full-sized screens just may not be as effective on smaller smartphones, so leads can be lost. Also, the iPhone doesn’t support Flash, which can degrade the experience (though its questionable how many landing pages actually contain video.)
Google reports to advertisers on the performance of clicks on different device types, so it’s at least possible to see how well the smartphone ads are doing. But many advertisers may not analyse the reports in that level of detail.
Google adopted its default smartphone advertising policy in late 2008. It did warn advertisers at the time, both in blog posts and in notifications on their personal AdWords pages. But it is debatable how effective these warnings would have been.
The blog posts were headlined “Extending your AdWords campaigns to the G1 and iPhone“, and “New AdWords options for G1 and iPhone.” So advertisers who had no interest in appearing on smartphones might well not have read any further – in which case they’d have missed the warning that their ads would appear on the smaller screens unless they did something to stop it.
It doesn’t look like there’s anything in this that would necessarily cause an anti-trust regulator to lose sleep.
But it is a reminder of Google’s ability to move quickly into new markets when it chooses to leverage the huge power of its core business.
