How Click-to-Call Boosts Google's Mobile Revenues
In October, Google crowed about its mobile business hitting a $1 billion run rate, though much of that is assumed to be mobile search advertising, an offshoot of Google's biggest business online. But Google's mobile revenues are also finding …
Context & Ripple Effects
When Google rolled out click-to-call billing in mobile ads at the start of 2010, the pitch was straightforward: let a searcher tap to ring the advertiser and charge by the call. Nearly a year on, GigaOM's analysis argues the format has grown into a genuine second pillar alongside mobile search advertising.
That matters because Google's October disclosure of a $1 billion annualized mobile business was widely assumed to be little more than its desktop search machine shrunk onto phones. A call-billed ad unit gives the company a revenue line native to the handset — and a template for charging small businesses who never bought search keywords.
First-order effects
- Local and national advertisers now have a mobile ad product priced on completed phone calls rather than clicks, widening Google's advertiser base beyond keyword buyers.
- The confirmed $1 billion mobile run-rate gets a second engine: click-to-call revenue accrues directly to Google's mobile line rather than riding on search budgets alone.
Second-order effects
- Rivals selling mobile inventory — Yahoo, Microsoft's Bing, and the emerging ad networks — are pushed to match call-based pricing or concede the local-business segment to Google.
- Phone carriers and directory publishers, whose paid-listing models rest on driving inbound calls, suddenly compete with an auction-priced alternative sitting inside search results.
Third-order effects
- If calls prove advertisers will pay for outcomes other than clicks, mobile advertising drifts toward action-priced formats built around what a phone can do — a structural break from desktop display and click economics.
The trend: Mobile advertising is splitting off from desktop click-pricing into device-native, action-billed formats, with Google's call billing as the early proof case.