BETA
This is a BETA experience. You may opt-out by clicking here

More From Forbes

Edit Story

At I/O, Google Launches New Attack On Facebook's Mobile Ad Goldmine

This article is more than 8 years old.

If there's one place where Facebook has stolen a march on Google , it's in mobile ads--in particular, ads that prompt smartphone users to install and use a particular app.

These app install and app reminder ads were a $6 billion market worldwide last year, and by most accounts, Facebook owned more than half of it. More than anything, the social network's early jump on these ads, which app developers depend on as much as online retailers depend on search ads, is why Facebook's revenues keep zooming and its shares are worth a collective $223 billion.

Today at its I/O conference in San Francisco for software developers, Google is sending a clear message to app creators: We can do app install ads better than anyone. The search giant is introducing a raft of new services and features that essentially offer a one-stop shop for software developers to promote their apps--not only on every major Google property, from its Play Store for apps to YouTube, but also on some 2 million other websites in its display-ad network and inside 650,000 apps that use its AdMob mobile ad network. "It's the biggest set of updates to our apps business ever," Jonathan Alferness, Google's vice president of product management for mobile display ads, said in an exclusive interview before the show.

The appearance of ads on center stage is a first for a Google I/O keynote, which is usually reserved for geek-outs on new operating systems and application programming interfaces punctuated by the occasional hot new hardware such as a Nexus tablet or Google Glass. The focus on ads is another stark sign of how much ground Google needs to make up against Facebook, Twitter , and others when it comes to mobile ads.

Although doubts abound about how long a run app install ads will have, given doubts about how long a run many apps will have, for now they're a crucial driver for mobile advertising overall. In turn, mobile advertising is an increasingly important revenue driver for apps and companies that make them. That's why Google, which like many veteran Web companies was caught short by the rapid rise of smartphone usage, needs to show that it understands how to help developers make money in its Android mobile operating software ecosystem.

First, Google is announcing a new type of mobile app install campaign that will allow advertisers to reach people across all of Google's properties at once. The company has been gradually adding new places to run app ads, most recently via search ads in its Play Store and on the 2 million partner websites in its Google Display Network where it syndicates other kinds of ads. Now, advertisers will be able to run ads across all of Google's properties: Google search, the Play Store, YouTube, mobile sites, the display network, and not least its AdMob mobile ad network.

That service, called Universal App Campaigns (shown in the animated screenshots above), will allow advertisers to type in a few things about the app, such as what the ad copy says, the audience it's aimed at, and how much they want to spend. A Google algorithm then automatically determines the most economical place to run the ads based on whether the goal is the lowest cost per install, the highest long-term value of each customer, or other metrics. "We'll find you the next cheapest users regardless of the channel they're on," Alferness says.

Universal App Campaign, which will roll out in coming months, is aimed at small app companies or those that haven't advertised. So it doesn't have the bells and whistles big advertisers already have in-house. For instance, advertisers can't choose which Google properties to run the ads on. In other moves aimed at helping smaller developers, Google also announced a way to create ads easily at the same time developers create the app itself, and to create so-called "native" ads that fit more naturally into a particular app, with little additional work.

Always trying to appear to be above the dirty competitive fray, Google doesn't emphasize the battle for mobile ad dollars versus Facebook. But there's little doubt that it has Zuck & Co. in its sights. Nowhere is that more apparent than in another new feature it's debuting that helps advertisers track the impact of mobile app install ad campaigns.

An upgrade to Google Analytics for Apps that the company is calling Mobile App Install Campaign Attribution, the feature allow advertisers to measure the value of their app, in terms of lifetime value or user retention. They can do that not only on Android and Apple's iOS, but also on more than 20 other ad networks, including InMobi and Millennial Media.

Conspicuously absent are Facebook's and Twitter's ad networks, which have their own analytics systems. Google also announced that app install data from other measurement firms such as AppsFlyer, Apsalar, and Tune can be used inside Google's AdWords system used by all of Google's advertisers. "We know developers use a lot of tools to promote apps, not just Google's," says Alferness.

In other words, Google's playing the same card it has played with Android vs. Apple's iOS, making itself look more open--in this case, to all the networks and measurement systems advertisers want to use. It must be said that it also resembles another model used by Microsoft when it tried to envelop the Internet in the 1990s: "Embrace and extend."

Not least, Google announced some news for developers that increasingly want to run ads on their own apps, as a way to supplement paid apps or in-app payments for game currencies and the like. Google has already allowed developers to use AdMob to tap into other ad networks to fill their ad space--a process called mediation. Today, Google said it has added 15 new networks in the past year, bringing the total to 40, including major ones like Facebook's and Twitter's, as well as one run by China's Tencent that is one of the largest in that country.

At least one firm that helps advertisers buy app install ads says Google already has been improving its mobile ads. "Over the past few months, we've seen increased performance on Google," says Craig Palli, chief strategy officer at the marketing technology company Fiksu. "Strengthened by today’s announcements, Google is well-poised to gain market share and become a far more significant player in the mobile app marketing space."

For what it's worth, at least one app developer trotted out by Google also likes what it sees. The music service Rhapsody was late to the app game, losing ground to the likes of Pandora and Spotify, and it's now trying to remedy that situation. So when Google announced a test of its search ads in the Play Store, says Josh Patrice, Rhapsody's director of online marketing, it went all-in, buying lots of ads.

"If we could be on the top of every search on music, we figured we could beat out Spotify," he said in an interview. Last week, the company got nine times more app installs using the ads than it did the month before. "It's been through the roof," he says. "The new services they're rolling out will be very exciting for us."

For many quarters, Wall Street analysts have been asking Google about the lower average prices of mobile ads compared with Web ads on computers. To quell those questions, Google will have to persuade a lot more Rhapsodies to sing the same tune.

Follow me on LinkedInCheck out my website