Google share price slumps as advertising revenues fall.

Both Google and Facebook have faced major share price slumps due to falling advertising revenues. Google shares even had to be suspended for two and a half hours following poor results.

 

Google stocks crashed by 11% and wiped more than £13.7bn off the value of the company after they accidently published latest figures that revealed a 20% fall in profits. Opps!

 

The problem is mobile. They get paid less because the ads don’t work as well. The trouble is, we use mobiles differently from PCs and respond much less to ads and the screen size is too small for impact (they fail the first letter of A.I .D. A.). This presents a major challenge to Google and Facebook and is one reason Google recently bought Motorola, though it’s not revealed what it plans to do with the company.

 

This has now raised the question about the effectiveness of mobile ads among investors, and probably boardrooms of big brands too, who have thrown millions into digital and are now chasing mobile ads as the next big thing.

 

Personally I think there is a big market in ads on mobiles, but it needs a massive rethink and if you know how then I’d keep quiet and sell it to Google for millions, they are desperate.

 

Recently Facebook hit similar problems when it was revealed it had based its ad revenue growth on PCs rather than mobile –  it had to admit it was failing to deliver effective advertising and had to watch its share price halve over night.

 

Another threat is the growing use of software like Mozilla’s AdBlockerPlus which blocks the ads, without the advertiser knowing. Works brilliantly on Facebook.

 

BACK TO BIG MEDIA

I heard today about a well know brand that has cancelled a big digital campaign to put their money into Big Media (TV and outdoor) to raise it’s brand awareness as a recent survey revealed its brand was declining in unprompted awareness.

 

While ad revenues on mobiles may be declining, on TV it’s growing both in the US and UK. This isn’t a case of digital vs big media, anymore than sales promotion vs direct marketing, or PR vs advertising, they all have their merits and all perform well in their own ways and even better when integrated well.

 

Those who declared that traditional media was dead and it was all digital have now woken up to the fact that TV and outdoor have embrace technology to give their mediums a turbo charge.

 

But then those who declare any media dead are pretty stupid, ever new generation just adds to the advertising tool kit. Victorian’s main advertising medium were flyers, which are still just as popular and as effective today.

 

But the next big thing is the new generation of 3D TV that is expected to be mind blowing. No funny glasses, this really is science fiction come alive. No doubt the big brands like Coke, Nike and others will be queuing up to make the first new generation 3D ads. And then we’ll all be declaring that digital is dead, long live 3D TV.

 

And then 5 years later… it’s the next fad.

 

Of course effective marketing isn’t just about the medium, it’s more about how you use it and how well you understand your audience.

 

BETTER CONSUMER INSIGHT

This week I attended a fascinating evening hosted by Spring Research with guest speaker Mark Earls (legendary planner for those not in planning). It reminded us of the importance of customer insight and the importance of context – how both environment and social influences effect how and what we buy.

 

It also raised a few questions about how we communicate – recommending a brand to a friend is 9x more effective face to face than online, there’s greater context for a start. And as 90% of conversations about brands happen off line, maybe more advertisers should focus 90% of their budget on good old WOM and just 10% on SM.

 

But then we live in a world where media trends and perception is more important than reality, and while brands keep using A,B,C1 (an outdated and discredited methodology) common sense, quality consumer insights and numbers that actually mean something (unlike Likes) are only appealing to the really smart and independent thinkers.

 

Discuss!

 

#OMGoogle

 

 

 

 

  • STEPHEN PHILLIPS

    As you say Chris, good integrated campaigns are best but these need to be based on insight. Start from the consumer; when are they interacting with the different media, what are they looking for and what can your brand offer. Work that out and you do AIDA in one go!

  • Guy Parker

    Didn’t advertising revenues increase, not fall?  A slowing rate of increase – to a *paltry* 19% year-on-year – is rather different to a decrease.

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