Google's role in finding mobile's tipping point

Mobile has been the next big thing for a while now, but infrastructure, smartphone penetration, user behavior, and walled-garden strategies by carriers have combined to keep it at irrelevant volumes to date, at least in the U.S. One relatively quiet piece of recent news could be a bit of a game changer.

Google has recently announced the beta launch of Google AdSense for Mobile Applications. According to Google's blog: "AdSense for Mobile Applications allows developers to earn revenue by displaying text and image ads in their iPhone and Android applications. For our beta launch, we've created a site where developers can learn more about the AdSense for mobile applications program, see answers to frequently-asked questions, and sign up to participate in our beta. Advertisers can also learn about the benefits of advertising in mobile applications."

To understand why this might be a game-changer, let's take a look back at the recent history.

Having observed the online dollars escape the ISPs and flow straight to the portals and search engines, the mobile carriers focused their initial efforts on limiting functionality and access to content, hoping you and I would never find out that there was more to be had than their expensive ringtones and wallpapers.

But these "on-deck" walled gardens proved ineffective -- the gardens were not beautiful enough, and the walls were not high enough. Users simply navigated outside the walls to seek out navigation and content consumption options they were accustomed to on their PCs. This created the mobile web we have seen mostly to date -- an "off-deck" version of the web, shrunk to fit on a small screen. Initially this involved a lot of squinting, but increasingly publishers are using device and browser recognition to direct mobile users to more suitable page layouts and resolutions.

In this environment, mobile web users have been seeing mobile ads for years, mostly served by, and largely undifferentiated from, existing web publishers. Search Google on your Blackberry, you get AdWords results. Visit your favorite website and see small versions of mobile banners. You can click and incur advertiser cost, and they can track the impressions and clicks (and in many instances, they can cookie you as well). Indeed Google has provided AdSense distribution in mobile content for a couple of years now, and you have almost certainly seen some of it, whether you realized it or not.

So what's different now? In basic terms, Apps is the first widespread adaptation of useful content to the screen resolution of mobile devices. So it has attracted an audience, and audiences always attract advertisers.

This tipping point of critical mass audience and standard form factor is just looking for the final piece of the puzzle -- a ubiquitous, self service, mobile advertising platform. And that's where Google AdSense for Mobile Applications comes in. Layer in the additional data about the long-tail of non-monetized apps available (free, demo, or simply unpopular -- see this AdMob report), and perhaps we have a case of "supply, meet demand."

What does this mean for advertisers and agencies? What was a "test and learn but don't expect much" environment may actually start to have some significance. Certainly the ground is shifting a little, and the barrier to entry is almost zero -- if you have a search tool with API access, you can get on board buying media right away. (In fact, most advertisers will be doing it without realizing it, assuming Google rolls it out as an option you have to choose to opt out of.)

If you are a creative/app developer, sign up for the beta but keep the dreams of becoming an AdSense millionaire in the same place you keep the dreams of becoming an App Store millionaire. The likely first beneficiaries of this shift (apart from Google of course) are going to be the big agencies that manage to convince their clients to commission a killer iPhone app for half a mill. (You know you're pushing it!)

It is interesting to note that we are still years behind more advanced mobile markets, such as Japan, Korea, and parts of Europe, where QR codes, couponing, and location-based offer targeting have been a part of daily life for a while. Getting there will require more development, not only in mobile infrastructure and bandwidth, but also in commercial infrastructure (such as point-of-purchase scanning) and transportation infrastructure. But for the time being, a man can dream.

Matt Kain is chief revenue officer at The Search Agency. 

On Twitter? Follow Matt at @mattkdecide. Follow iMedia Connection at @iMediaTweet

 

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