May 24–Google executives announced Tuesday that the company is adding more features and updating its mobile search and display ads, as marketers continue to shift spending from desktop ads to ones built for smartphones.
Google said advertisers can pay for promotional pins, or markers, placed on the routes of Google Maps users, so that a user who likes drinking Starbucks may see a discount on a Frappuccino on the way to her destination. Search ads on Google Maps will also have more detailed information, so when a user looks up a nearby electronics store, for example, it will list what items the retailer has in stock.
"It's very clear to us and to all the advertisers that we speak with that mobile is something that is already here," said Sridhar Ramaswamy, a senior vice president of ads and commerce. "It is the mainstream. You'll see our product announcements really reflect that."
The amount of revenue Google makes in mobile search ads is expected to grow, as its sales in desktop ads decline, according to research firm eMarketer. In 2014, Google made $5.9 billion in mobile search ads in the U.S., compared to $10.3 billion for desktops, eMarketer said. This year, Google's U.S. mobile search revenues are expected to be greater for the first time, with mobile ads raking in $11.45 billion compared to desktops at $10.58 billion, the research firm forecast.
Meanwhile, Google's display ads on mobile aren't expected to eclipse desktop ads anytime soon. In 2016, Google's U.S. display ads on mobile devices are estimated to bring in $1.89 billion in ad revenue, compared to desktops at $2.72 billion, eMarketer said.
The advertising announcements, made at a press event at the Fairmont Hotel in San Francisco, had a different feel than last week's I/O conference for developers in Mountain View, where Google CEO Sundar Pichai talked about the potential of machine learning and Google's technology to cure diseases like diabetic retinopathy. At the San Francisco event, Google touted solutions to a far more prosaic if profitable problem: how to get consumers to buy things.
Jerry Dischler, a vice president of product management, said advertiser-sponsored pins on Google Maps will roll out this year and appear on users' screens based on their location, interests and other data. There will not be an option to turn off the promoted pins, Dischler said. Google Maps has more than 1 billion users, the company said.
Consumers' reactions will likely depend on whether the ads deliver things they actually want, analysts said.
"If I am passing areas of interest to me, making a side stop to buy something is logical," said Tim Bajarin with advisory services firm Creative Strategies. But Bajarin also warned that if the ads are "not contextual and something I am really interested in, it's just an annoyance."
Google says it sees an opportunity for the company, as 90 percent of sales happen in physical stores and nearly one-third of all mobile searches are related to location. Location-related mobile searches are now growing 50 percent faster than mobile searches overall, Dischler said.
Wendy Lee is a San Francisco Chronicle staff writer. Email: [email protected] Twitter: thewendylee
