Ad auctions, as we’ve seen in class, generate large amounts
of income for big name companies like Google who pulls in $12-16 billion
annually from ads. As time goes on, the amount of total revenue earned from
selling and hosting ads on the Internet continues to grow. Even as online
advertising expands, another platform’s advertising potential continues to rise
and has become a new ad battleground for these big companies.
Mobile devices continue to be increasingly popular and have
reached a large percentage of the general populous. Many people rely more on
their mobile devices, such as phones and tablets, than their own computers.
When you have the Internet in your pocket, why sit at your desk? This huge boom
of mobile usage has created a large market that many advertisers are still
trying to figure out. Mobile webpages and apps can be equipped with ads like
their computer counterparts, but many companies haven’t taken full advantage of
the capabilities. For this reason, a lot of the mobile adspace remains unclaimed.
With this low demand, prices for ads on mobile devices are lower than for full
computers.
To win a higher share of this market and attract new
business, Google and Apple have been slashing their prices for mobile ads,
lowering their minimum prices. This change follows Facebook and LinkedIn’s
desire to open up advertising on their mobile apps. Many big companies are
going head-to-head to secure business and gain a large portion of the market
before it ultimately explodes with demand. With so many potential targets, it
is only a matter of time before companies catch up to the mobile shift and ads
start flooding mobile devices.
Even with all the price decrease and buzz, the overall
advertising schema remains roughly the same. Google’s new changes bring its
ad-auction system in line with its desktop counterpart. The cost-per-click and targeting
auctions discussed in class will still play a huge role in the pricing for
mobile ads. These prices drops are merely meant to entice new comers to the
field before the competition ultimately becomes as heated as the desktop
market.
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