This is what my eagle-eyed chum Stuart Smith thinks anyway, in a recent post.
This is what he writes.
As a headline grabber, it isn’t quite up there with the search giant’s big news of the week – ‘Google and Heineken seal ad partnership landmark’.
That deal, which involves a sizeable chunk of Heineken’s €2.1bn global advertising budget being poured directly into Google inventory such as YouTube is indeed a ground-breaker. And a deeply worrying one at that for ad agencies, who must now face up to the possibility of other major packaged goods companies “disintermediating” them with extreme prejudice from the digital deal.
No, this was a much smaller scale event, but in its way just as significant. It demonstrates the skill with which Google micromanages the digital ecosphere, as well as macromanages it.
What is this product? It’s a remarkably simple means of SMEs creating their own mobile sites free of charge (including analytics), thanks to an almost foolproof Google template.
Unimpressed so far? Well let’s look at some of the thinking behind this low-key launch. As you will know, mobile traffic is soaring. Here are some key statistics, which I quote courtesy of Ian Carrington, Google’s UK mobile advertising sales director (so bang up to date, really).
Last year, mobile traffic quadrupled. The number of handsets in circulation doubled from 500m to 1bn. In Q4 last year, smartphone sales surpassed sales of PCs for the first time – 2 years ahead of the forecast by the world’s most respected expert on the subject, Mary Meeker. Last year, 36% of the UK mobile-owning population (pretty much everyone) owned a smartphone, up from 24% the year before; this year penetration is expected to hit 50%.
You get the picture. Sales of smartphones, especially Android-powered ones, are going gangbusters. And, not surprisingly, people are increasingly using these objects of desire to make purchases on the hoof: 28% who own a phone have done, or have tried to do so, I am told. Ebay has risen to this challenge magnificently. Last year it did over $2bn of e-commerce via smartphones. It even manages to sell 4 Ferraris a month over via m-commerce.
Alas, most retailers can’t keep up with this heady pace. The number of mobile-enabled websites is, I’m told, criminally small. Google claims only 17% of its top advertisers have “mobile-optimised landing pages”. Most retailers still rely on a boiled-down version of their PC website, which is not very user-friendly of them. So Google is helping them out, with a loss-leader. However, the “free” part of the deal applies only to SMEs (the butcher, the baker, the candlestick maker). Bigger companies will have to to dig into their own pockets. By swamping the local market with free and easy-to-use product, Google hopes to pre-empt any third-party competition and “own” the SME m-commerce sector.
Awesome, as they say over at Mountain View – and just another example of the search giant’s crafty attention to detail.
Sooner or later Google will have to declare its hand on advertising: is it content just to provide data, in effect fuel, the advertising specialists like WPP (which is challenging Google with its Xaxis launch) and Publicis Groupe’s Vivaki, or does it want to eat their lunch?
And are clients like Heineken wise to get into bed with the info giant?
Search me guv’nor, but we’ll bring you the latest news from the front.