Google results show mobile ads driving profit

Small businesses have been given yet another warning to start investing in mobile ads, with the latest Google financial results indicating the value of mobile advertising is on the rise.

The results also come just a day after figures from Experian showed more Australians are spending less time browsing social networks on their desktops, and are instead connecting and browsing through mobile devices.

Google’s results show in the first quarter  profit of $US11.58 ($11.26) per share, with revenue of $US11 billion. Over 15% of advertising came from mobile ads and YouTube.

But analysts looked to statistics on mobile ads for an indication as to where the market is heading.

Google’s announcement showed the average ad price fell by 6% during the last three months of 2012, and by 12% during the first quarter of the current financial year. Analysts suggest this is because more advertisers are shifting to mobile devices, leaving desktop advertising aside.

Google’s growth is a good indicator of the health of the advertising market, as it controls a massive chunk of the online ad industry.

Jim Stewart, the chief executive of StewArt Media, told SmartCompany this morning mobile is still relatively inexpensive, although the result is another indicator SMEs should be moving into advertising through mobiles.

“You need to check your Google Analytics, and check the traffic to your site that’s coming through mobile devices. Check which mobile devices they are, and you can advertise to them,” he says.

“Mobile is still relatively inexpensive, so you can target very specifically. You can even target whether you want to be on specific networks, like Telstra, or Optus.”

The shift towards mobile advertising has been slow, but now it is essential for SMEs to advertise on mobile devices. Search engine optimisation experts say businesses which advertise through mobile devices are more likely to see conversions, as shoppers on the run will see advertising targeted at them from local stores.

Stewart says advertising features which even allow users to call businesses directly from within the ad are a popular choice. “The click and call ads are still good,” he says, although notes Google has made specific changes around how they work.

Meanwhile, tech giant Microsoft also announced solid results, which beat Wall Street expectations.

The company announced revenue of $US20.49 billion for the third financial quarter of the year, although profit was at $US0.72 a share – above market expectations of $US0.68 per share.

Microsoft also announced chief financial officer Peter Klein would leave his role after eleven years at the company.

Microsoft has been pushing the launch of Windows 8 across desktop and mobile devices, along with its Surface tablets. However, sales have been lacklustre, and critics say the business is still too dependent on its enterprise software.