Mobile Key To Google Ad Strategies

Mobile is quickly becoming the "backbone" to advertising strategies, with Google+, the "social spine" supporting Gmail, YouTube, Wallet and other applications for about 170 million users. That's what Larry Page, Google co-founder, told investors during the company's first-quarter 2012 earnings call Thursday.

Page did not go into a lot of detail about the company's mobile strategy. The decision did not go unnoticed. "We are surprised that Google didn't go into more detail about on the call, as we see mobile bringing in more than 10% of revenue and growing," said Roger Barnette, IgnitionOne president. "Smartphone and tablet search accounted for 12% of total search advertising spent in Q1, and ad spend for these devices rose 221% year-on-year this quarter."

eMarketer estimates that Google's share of overall U.S. mobile ad revenue reached 51.7% in 2011.

As for Google's core revenue-generating business, the company continues to capitalize on its lead in clicks related to ads served on its sites and those of network members. The Mountain View, Calif. company reported in its Q1 2012 earnings report that clicks rose 39% in Q1 2012, compared with the year-ago quarter, and approximately 7% sequentially.

Average cost-per-click, which includes clicks related to ads served on Google sites and those of network members, declined approximately 12% in Q1 2012, compared with the year-ago quarter, and approximately 6% sequentially.

About 69% -- $7.31 billion -- of total revenue came from Google sites for Q1 2012 on revenue of $10.65 billion for the quarter ended March 31, up 24% from the year-ago quarter. Revenue rose 24% in the quarter, compared with Q1 2011.

Google's partner sites generated $2.91 billion -- or 27% -- of total revenue, representing a 20% increase. Revenue from outside the United States totaled $5.77 billion, representing 54% of total revenue, compared with 53% in Q1 2011. Revenue from the United Kingdom remains flat year-on-year at $1.15 billion, representing 11% of first-quarter revenue.

The overall U.S. online ad market rose 22.7% to $8.9 billion in Q1 2012, compared with the year-ago quarter, according to eMarketer. The research firm estimates Google's share of the annual $39.5 billion U.S. online advertising market will reach 44.9% in 2012, up from 41% in 2011.

eMarketer estimates that about one in 10 advertising dollars spent in the U.S. will belong to Google as the ad market rises to $169.5 billion in 2012, up from $158.9 billion in 2011.

Three trends in Q1 drove business. Companies want solutions for all devices, major brands have realized the worth of online advertising, and cross-media measurement continues to gain traction. Companies have finally realized the online channel drives in-store sales, and more than 10 million people now use Google Analytics, according to the company.

Google also confirmed this week that it acquired .Google top-level domain (TLD) name ahead of ICANN's April 12 deadline, adding to the traditional .com, .org, .net and others.

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