Google’s Nikesh Arora On Mobile Ads: It’s ‘Where Search Was In 1999′

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One of the themes that came up repeatedly during the conference call for Google’s second quarter earnings was mobile advertising. Analysts asked a number of questions that, collectively, seemed to be gauging what the shift to mobile means for Google’s advertising business.

Senior Vice President and Chief Business Officer Nikesh Arora (pictured) offered some numbers at the beginning of the call, saying that with AdMob integrated into AdWords, according to any leading mobile ad network 1 million AdWords advertisers have access to the 300,000 mobile apps in the AdMob network. When asked specifically about mobile cost-per-click rates, Arora didn’t get too specific, but he said they’re “healthy.”

“The good news is, we’re seeing phenomenal growth in mobile queries across the board,” Arora said. “Mobile is right now where search was in 1999.”

He pointed out that Google has been unveiling a number of ad innovations that are specific to mobile, like a click-to-call option (which generates 15 million calls every month). As that continues, we can expect to see mobile ad pricing to rise, similar to the trajectory of search ads.

Google’s overall CPC rates were actually down 16 percent compared to the same period last year, and Arora acknowledged that the drop was partly because mobile and tablet ads made up a bigger part of the mix. He cited other factors too, such as the mix of developed and emerging markets, and he argued that while CPC is “an important metric for us” it doesn’t necessarily reflect “the fundamental health of our business.”

Another question wasn’t directly about ads, but it addressed some of the same issues: As mobile searches grow, are they taking away from desktop searches? Senior Vice President of Ads Susan Wojcicki cautioned that it’s a complicated issue that Google is still analyzing (especially when it comes to tablets), but she said, “We believe that mobile searches are mostly incremental.” She noted that smartphones and tablets are mostly used on-the-go, so Google’s hope, at least, is that they’re just leading to a bunch of new searches, rather than replacing the ones you would’ve done on your desktop.