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Posted on October 30, 2008

Search Going Mobile

Search Going Mobile
Posted on October 30, 2008

Phones with Browsers

I find the statistics about search migrating from PC’s to phones to be particularly compelling.  That is, according to Wikipedia, there are 850 million personal computers in use, and 3.3 billion mobile telephones (as of November 2007).

Although 24% of those phones are web enabled, only about 3% can access the web with a browser.  Phones are replaced every 18 months, so within the next several years, it’s likely that the number of phones with internet connections will come to outnumber today’s phones, which are used primarily for voice & text messaging.

G1 versus Iphone versus Blackberry

Indeed, one of the best performing companies in the US market this year is Apple Computer, and much of Apple’s growth is being driven by the success of its iPhone.  Google obviously believes that the future of search will be enhanced significantly by the mobile phone, or they wouldn’t have invested in Android (officially developed collaboratively under the Open Handset Alliance).  Upon launch Google was flogging the G1 phone with a text link on their home page.  Research in Motion is also scheduled to debut its newest browser-based phone.

Adwords Phone Ads are Dead

We recently spoke with our Google Agency representative about the future of phone ads.  It was interesting to hear his lackluster support for them.  Upon further reflection, it should come as no surprise, given his bullishness on the migration to browser based phones.  Phones like G1, iPhone, and future Blackberry phones are going to make phone ads even less relevant, not more relevant.  So, unless you live in Japan (the world leader in internet enabled phones which don’t access the internet with a browser), seems like phone ads may be a dirt road for most advertisers.

Implications of Mobile Browsers

Regarding migration to G1 and iPhone browser capable phones, there are other important ramifications for advertisers.  Consider the G1’s ability to scan a bar code, and give a shopper alternative price quotes.  This is going to drive purchases of not just high end goods, but any item worth it’s weight in UPS shipping towards online internet shops.  Of course this means more online shops are coming in 2009 and 2010.

The implications are also significant, for other forms of retail.  What impact might this have on modern shopping malls for example?  Mall shops could become display showrooms, a place where shoppers demo but seldom buy premium quality, overpriced products.  You’ll find as early as 2009, fearful shop owners will begin placing olympic strength stickers over product bar codes and revert to 1970’s style little handwritten garage sale type price stickers on all their high-end products.

Mobile Browsing – Zero Marginal Cost

Why hasn’t this happened yet?  Because until now, the cost and effectiveness of phone search was relatively expensive.  However, once you can access a web browser with a phone for zero marginal cost (all plans for the G1 phone and iPhone include unlimited internet access), then we will come to find that the average Joe using a phone bar scanner in Safeway on a 48 pack of size 4 diapers.  When this happens, shopping will migrate significantly towards the discount retailers.  Discount retailers like WalMart and Target will not only broaden their product offerings to carry higher quality items at discounted prices, but will also begin pumping staples out of their super stores in ever increasing volumes.

Mobile Browsing, the Bottom Line

  • Advertisers:  Search gets a powerful second surge, become an even more compelling adverting channel.
  • Pay Per Click Ad Agencies, like Denver PPC:  Hire & train more SEM Professionals.
  • Shopping Malls:  Mall owners, sell the mall; Watch shop owners & handbag shop owners: sell the shop.
  • Price Sensitive Shoppers:  Buy a G1 Phone today!
  • Investors:  Buy UPS, WMT, GOOG; sell DDS, EBHI, BGP.