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Google’s Earnings Show That Mobile And Social Are The Future | Mobile Ticket App

Google’s Earnings Show That Mobile And Social Are The Future

Google reported its earnings for Q1 2012 on April 12, with gross revenue of $10.65 billion, up 24% year-on-year. [1] It also reported a significant jump in operating and net income, and the same ratio of traffic acquisition costs as a percentage of advertising revenues as in 2011 – 25%.

As a result of its push into mobile advertising, the cost-per-click dropped nearly 12% over last year, but there was a 39% growth in aggregate paid clicks, which led to a healthy increase in advertising revenues. We expect this trend to continue as mobile search advertising drives the next phase of earnings growth for Google while traditional online search advertising takes a backseat. Mobile and social to drive Google’s ad revenue going forward

Going forward, we expect mobile search advertising revenue to continue to increase at a rapid pace, andeventually supplant traditional search advertising as Google’s primary growth in cash flow.

Since the average revenue per search is lower for mobile ads, the rise in mobile advertising should continue to weigh on the average cost-per-click charged to advertisers. However, the increase in the aggregate number of paid clicks driven by increasing mobile internet usage will more than compensate for it and lead to an overall increase in Google’s ad revenues.

Eventually, we expect Google’s average revenue per mobile search to increase as Google improves its mobile ad offering and attracts more advertisers through better targeting and a higher ROI with hyper-targeted ads.
Google Mobile Growth

We also expect Google’s Android efforts to pay off in the smartphone and tablet spaces eventually by indirectly helping drive the growth of mobile advertising.

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