Tablets will generate Google around US$5-billion in revenue this year. No, it won’t be from sales of the Nexus 7, but from advertising.
According to a new study by Marin Software, a company which helps advertisers buy web-ads, the effectiveness of search ads on tablets climbed 31% in 2012 and conversion rates on tablets are set to eclipse those of PCs by the end of the year. As the company notes, this bodes well for Google.
Handily, the research also comes on the back of news that Google would be boosting the prices it charges advertisers to display messages in its mobile search results. Google also recently made changes that forces advertisers to pay the same for tablet advertising as they do for web advertising.
According to Marin, the shift from Google is being met by a shift from the advertisers themselves. The company says that advertisers are already starting to spend more of their budget on tablets than they do on smartphones.
“Either tablets have overperformed or smartphones have underperformed,” said Matt Lawson, Marin’s chief marketing officer, told the Wall Street Journal. The latter does seem a little more likely given that it’s more difficult to track how ads on smartphones lead to in-store purchases.
According to the Journal, record tablet sales mean they will account for 20% of the mouse clicks on Google’s search ads in the US, up 10.7% at the end of 2012.
Marin also points out that the fact that Google is the default search engine on most tablets means that Google will be able to extend its lead in the search revenue stakes over the likes of Bing, especially in sales of Microsoft’s own range of Surface tablets remain as low as they have been since its launch in late 2012.