Google has become a leading source for revenue among app developers. The company, which posted double-digit sales increases on its ad network for the latest quarter is now approaching an annual revenue of $20 billion.
As mobile penetration continues to grow, Google’s AdMob platform which focuses on apps as well as DoubleClick for publishers are gaining momentum.
Whilst AdMob focuses on mobile app advertising, DoubleClick is preferred by advertisers seeking customization and a preferred tool among brands with multiple websites and apps.
The company has steadily lowered its commissions and rolled out new formats such as video to boost interest across the platforms.
At the same time, the company is offering creators a bigger piece of the pie in ad sales. During Q4 2017, despite network revenue increasing $559 million, Google’s share of ad sales dropped by $33 million compared to the previous year. Subsequently, Alphabet shares dropped 5%.
However, the strategy seems to be paying off for Google nonetheless. Of every $1 Google makes from advertising sales, it gives developers $0.70. Many competitors are offering only $0.50 to $0.60.
This has led to in-app ads almost tripling in 2017 compared to 2016 on the DoubleClick Bid Manager. A whopping 1.1 million Android apps now run the Google advertising software, which highlights the platform’s widespread penetration.
As ad buyers shift toward apps, Google is expected to see smaller profits. However, it may all pay off for the company in the end.
February 16, 2018