Though the business of mobile advertising is often criticized for its low prices and minimal revenue, not to mention the awkwardness of cramming ads on a small screen, Google CFO Patrick Pichette thinks it won’t always be that way.
“I am convinced that the margins on mobile have to be higher than on desktop,” Pichette said today, speaking at the Bank of America Merrill Lynch Technology Conference in San Francisco.
Factors like proximity targeting, local offers and mobile payments should make mobile ads in many categories more valuable, Pichette said. “The premise that mobile has to be a lower CPC [cost per click] because today it’s a lower CPC doesn’t make sense.”
Plus, Google got into mobile ahead of its competitors, Pichette claimed, citing its investment in Android. “We decided to go mobile five years ago, not last month,” he said — which could have been a reference to Facebook’s new mobile advertising plans, which only came out in February after it filed to go public.
Other topics that came up during the conference Q&A included Google’s pending Motorola acquisition — which Pichette said was about hardware, not just patents — and Android tablets — which Pichette said are “a very high focus area.”