Google Results Show Inevitable Adjustment to Mobile Is Not Easy

GoogleGoogle has some of the highest performing stock in the world. Very important people pay attention to the company’s earnings reports and its quarterly results very intently. Business owners and tech enthusiasts also comb through the reports to glean whatever information they can on what direction Google appears to be taking with their strategy and products. Just yesterday Google released its second quarter results and they contain some interesting info.

Some Good Numbers, Some Bad Numbers

Unfortunately for Google, according to Amir Efrati at the Wall Street Journal, Google’s profit and sales are still doing well, but “deceleration in the growth of its main business of selling search advertising reignited concerns” about how the company and the industry are handling the transition to more mobile-based advertising. Before we get into that, let’s take a look at the changes affecting Google for the second quarter.

For one thing, as John Shinal reports for MarketWatch, Google is “at last figuring out how to make money off the millions of videos on its YouTube site.” This is giving the company more leverage in taking on rivals like Amazon and Netflix. Google’s results also show businesses and agencies that online video advertising is becoming (or already is) as effective as traditional video advertising. For quite some time many believed that YouTube couldn’t compete, but the numbers are showing the reality that it’s a growing and effective market for advertising.

Claire Cain Miller at the New York Times reports on another disappointing aspect of Google’s second quarter results, which lead into the mobile woes its facing. She writes that Google’s “desktop search business continues to slow and ad prices continue to fall as it struggles to make as much money on mobile devices.” It’s definitely a problem as everyone in the industry knows that mobile is growing rapidly and becoming an increasingly more important platform to reach consumers.

Don’t Worry, Google Has a Plan

Of course, Google wouldn’t be a hugely successful company if it wasn’t able to tackle its problems head on. Back in February the company introduced some changes to its AdWords product. These changes become mandatory for everyone using the product this Monday. What changes?

As Claire reports again, the major change in these enhanced campaigns with AdWords is the fact that “advertisers [have] less choice about advertising on mobile devices by automatically including desktop, tablet and cellphone ads for all campaigns.” Google is basically saying if you want to run ad campaigns with us, you run them on every platform we utilize.

Google made this change to gain more control over mobile advertising, as many businesses and agencies appear to have trouble implementing a mobile ad campaign. It certainly isn’t easy and Google knows a thing or two about successful ad campaigns on its own product. They are helping out their clients by helping themselves, or is it the other way around? It doesn’t really matter as long as the ads prove effective, right? More importantly, the change looks to be an attempt to keep the cost of advertising with Google from continuing to drop.

What do you think about the earnings report from Google? Are the changes to AdWords good changes?

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Patrick currently lives in Somerville, Massachusetts, where he is studying for a Master's Degree in Intercultural Relations. Upon graduation from Penn State in 2008, he spent two years overseas in Kyrgyzstan with the U.S. Peace Corps. While writing is currently his chosen way to put food on the table, he loves fitness and exercise, which he believes makes up for his avid computer gaming habit.

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